The MOU covers a comprehensive infrastructure sharing and drilling programme around a group of marginal field assets in OML 11
Image: Otakikpo JV is expected to incur approximately £135m capital expenditure. Photo: Courtesy of Free-Photos from Pixabay.
Nigeria-based oil and gas exploration and development company Lekoil, through its Otakikpo Joint Venture (JV) with Green Energy International (GEIL), has signed a Memorandum of Understanding (MOU) with Schlumberger and subsidiary of a major international oil company.
The MOU covers a comprehensive infrastructure sharing and drilling programme around a group of marginal field assets in OML 11.
The Standard Chartered Bank is expected to serve as the lead financial advisor for the project and provide the required financial advisory, security and banking services.
Lekoil CEO Lekan Akinyanmi said: “This MOU is a significant milestone for LEKOIL and the Otakikpo JV. It secures the necessary funding, subject to the various conditions being satisfied, to drill additional wells and unlock further value at Otakikpo.
“We are pleased to be working with Schlumberger (who brings world class implementation) and other members of the consortium. We look forward to the transformation of operations infrastructure and an opportunity to earning revenue along the value chain.”
Lekoil said that the phased development plan of the project is comprised of drilling five new wells in Otakikpo, expanding processing infrastructure, and construction of an export pipeline connecting the onshore terminal to an offshore buoy to handle Otakikpo and other fields in OML11.
Schlumberger is expected to provide costs for project management and associated asset management, which are shared between the Otakikpo JV, the operators and owners of other marginal fields in the project.
Otakikpo JV to incur approximately $170m (£135m) capital expenditure
The Otakikpo JV is expected to incur approximately $170m (£135m) capital expenditure covering new wells and processing infrastructure, out of which the company is expected to fund $68m (£53m) for the JV.
Lekoil said that the estimated costs cover debt repayment for financing parties, including the major oil company, and project implementation fee paid to Schlumberger.
Furthermore, the final investment decision on the development is subject to the satisfaction of customary conditions precedents, including the credit committee approval of financing parties and the execution of definitive project agreements.