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Nigeria is to earn over $10.2 billion in royalties and taxes from the development of Oil Mining Lease (OML) 13 in the next 15 years courtesy of a $3.15 billion Financing and Technical Services Agreement signed between the Nigerian Petroleum Development Company (NPDC) and Sterling Oil Exploration and Energy Production Company Limited (SEEPCO).
The Nigerian National Petroleum Corporation (NNPC) also said the pact would enable the country increase oil reserves and daily production to three million barrels per day.
The deal would specifically lead to the development of the oil block, fully owned by the NPDC, located in the eastern axis of the Niger Delta and occupied a total area of 1987 square kilometre.
Group General Manager, Group Public Affairs Division of NNPC, Ndu Ughamadu, who quoted the Group Managing Director, Mele Kyari, said the fund would be “a game changer to oil and gas project financing in Nigeria.”
Represented at the event by the Chief Operating Officer, Upstream, Roland Ewubare, Kyari communicated President Muhammadu Buhari’s approval of the transaction.
Urging the management of NPDC to develop a strong community engagement strategy to forestall any crisis that could hinder operations, Kyari disclosed that NNPC would earn over $5 billion after full payment had been effected.
The GMD disclosed that the acreage boasts of over 926 million stock tank barrels (mmstb) and 5.24 trillion cubic feet (tcf) of oil and gas reserves, noting that the $3.15 billion ceiling funding would be provided by SEEPCO with a 10-year capital investment period and five years for cost recovery.
First oil production of approximately 7,900bpd from the facility is billed for April 1, 2020, while exploration would peak at 94,000bpd and 542mmscfd within four years.
Chairman of Sterling Oil Exploration and Energy Production Company Limited, Tony Chukwueke, expressed delight at the opportunity offered the company to support the production and reserves’ growth aspiration of the Federal Government.
In a related development, issue of failing refineries was on the front burner in the Senate yesterday.
The lawmakers brainstormed how best to make the facilities operate maximally even as the upper legislative chamber resolved to invite the yet-to-be named ‘Minister of Petroleum’ and the NNNPC GMD to brief it on the status of existing refineries and the newly licensed modular variants in the country.
The debate followed a motion sponsored by Rose Oko and 42 others tagged, “Existing Petroleum Subsidy: Ensuring Self-Sufficiency in Domestic Refining of Petroleum Products.”
She noted that though the nation produces 1.7 million barrels of crude oil per day, its moribund refineries, however, had very low refining capacity.
In his contribution Patrick Ifeanyi Ubah sought $1 billion for Nigerian investors as collateral to revive the refineries, adding that 10 of them for instance, would automatically end fuel subsidy and fetch government income.
In his remarks, Senate President Ahmad Lawan said the motion was to ensure that the 43 licensed modular refineries become operational.