Chibisi Ohakah, Abuja
Nigeria looks forward to raking in over $10.2 billion in royalties and taxes in the next 15 years from the signing of the $3.15 billion financing and technical services between Sterling Oil Exploration and Energy Production Company Limited (SEEPCO) and the exploration and production arm of NNPC, the Nigerian Petroleum Development Company (NPDC), for the development of Oil Mining Lease (OML) 13.
The Nigerian National Petroleum Corporation (NNPC) is expected also to earn over $5 billion after payment of the entire financing obligation. The quest by Nigeria’s national oil corporation to increase the nation’s crude oil reserves and daily oil production to 3million barrels per day would equally receive a major boost.
Located in the eastern axis of the Niger Delta, covering a total area of 1987km, the Oil Mining Lease 13 is 100% owned by the Nigerian Petroleum Development Company (NPDC), a subsidiary of the NNPC.
Commenting on the deal during the signing meeting in Abuja, the Group Managing Director of NNPC, Mallam Mele Kyari described the funding arrangement as “a game-changer to oil and gas project financing in Nigeria”.
The GMD, who was represented by the chief operating officer, Upstream, Mr Roland Ewubare, expressed gratitude to President Muhammadu Buhari for approving the transaction, adding that OML 13 held strong potentials both for the petroleum industry and the nation’s economy.
He advised the management of NPDC to develop a strong community engagement strategy to forestall any crisis that could hinder operations. The GMD disclosed that the acreage boasts of over 926 million stock tank barrels (mmstb) and 5.24 trillion cubic feet (tcf) respectively of oil and gas reserves.
According to him, the Financing and Technical Services Agreement was for a period of 15 years while the $3.15bn ceiling funding would be provided by SEEPCO with a 10-year capital investment period and five years for cost recovery.
He said that oil of about 7,900bpd is expected from the project by 1st April 2020, while production is expected to peak at 94,000bpd and 542mmscfd within four years.
On local content, the project is expected to enhance participation by indigenous companies in the industry by providing over 2,000 direct and indirect job opportunities.
Also speaking at the occasion, chairman of Sterling Oil Exploration and Energy Production Company Limited, Mr Tony Chukwueke, expressed delight at the opportunity offered the company to support the production and reserves growth aspiration of the Federal Government.
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