The Nigerian National Petroleum Company Limited (NNPC) yesterday signed a $1.4 billion external project finance agreement for the funding of the Kolmani Integrated Development project, which was arranged jointly by Standard Chartered Bank UK and the United Bank for Africa one week after the presidential flag off of the Kolmani drilling.
At the signing ceremony conducted in London, the contract was signed under the NNPC Limited/Chevron Nigeria Limited Joint Venture.
While addressing other partners at the ceremony, the executive vice president of the NNPC, Mr. Adekiye Tombomieye, said that the market’s strong confidence in the NNPC was clearly demonstrated by their participation in the funding program.
The Nigerian National Petroleum Company Limited (NNPC) estimates that the $1.4 billion in external project financing will generate $6 billion in revenue over the course of 20 years.
According to Mr. Umar Ajiya, the NNPC Ltd.’s Chief Finance Officer, the fund would be derived from royalties and taxes from the execution of the agreement.
According to what was learned, the arrangement would guarantee that the hydrocarbon project would receive external financing from 16 lenders located in three different continents.
Ajiya claimed that the loan facility indicated that, as a result of the passing of a new framework under the Petroleum Industry Act, financial institutions now have some level of confidence in the sector (PIA).
According to Ajiya, the project is also anticipated to increase the NNPCL/CNL Joint Venture’s production.
He added that the scope of the project includes 37 development wells, spread across 10 NNPCL/CNL Joint Venture fields from 2022 to 2026, consisting of 31 oil producers, one gas well, and five water injectors.
He claims the project has a top-notch resource base and will produce 166 MMBO of oil and 97 MMBO of gas per day, for a combined output of 263 MMBOE.
He said
“This is in line with the recent reforms in the NNPC brought about by the PIA which was signed into law late last year by the president. This has rekindled and also raised the appetite of international lending communities to lend to NNPC and its partners for fossil fuel development.
“This $1.4 billion is aimed at utilisation of drilling of 37 development wells, oil and gas. As a consequence, all the gas that will come out of this development will be diverted to the domestic market which goes in line with our energy transition plan.”