The 23 onshore and 13 offshore oil wells will be operated and developed by NNPC along with its joint venture partner Chevron Nigeria.
Being financed by a consortium led by Standard Chartered Bank and United Bank for Africa, the multi-year drilling financing package will also be used by NNPC to help maintain its current production levels.
The NNPC/CNL joint venture, which is said to be the country’s third largest oil producer, is scheduled to complete drilling program for the wells over the next three years in two phases.
The first phase involves drilling of 19 wells which are expected to produce 21,000 barrels of crude oil and condensate per day as well as 120 million standard cubic feet of gas per day in 2015 and 2016.
During the second stage, 17 wells will be drilled, which are estimated to have oil production capacity of 20,000 barrels of crude oil, as well as condensate per day and gas production capacity of 7 million standard cubic feet of gas per day between 2016 and 2018.
NNPC expects the two stages to generate incremental revenue of up to $5bn.
The funding package is the NNPC’s integral part of the accelerated upstream financing program, which aims to help Nigeria to meet obligations to its counter-part JV upstream activities.
NNPC group managing director Dr. Ibe Kachikwu said the new alternative funding arrangement will be the new contractual model in upstream financing which would serve as a template for future initiative to supplement the Federal Government’s Joint Venture Cash Call commitment.
"I have always believed that issues of Federation Accounts must be left sacrosanct and not be toyed with. The Accelerated Upstream Financing Programme is designed to help us achieve this objective."
Nigeria, which is estimated to hold crude reserves of 37.4 billion barrels, is said to be largest oil producer in Africa with crude oil export capacity of about two million barrels per day.
Image: The Nigerian National Petroleum/ CNL joint venture will drill the 36 oil wells in Nigerai. Photo: courtesy of Nigerian National Petroleum Corporation.
