24 July 2019 : The Nigerian National Petroleum Corporation (NNPC) and Sterling Oil Exploration and Energy Production Company Limited (SEEPCO) have signed a financing and technical services agreement worth $3.15 billion to facilitate the development of Oil Mining Lease (OML) 13.

OML 13, is a bankable oil well situated in the eastern axis of the Niger Delta, spread over 1987km² of area is owned by Nigerian Petroleum Development Company (NPDC). The oil well hold great potential not only for the petroleum industry, but also the country’s economy.

According to the 2019 budget, the largest nation is Africa estimated to produce 2.32 million barrels per day and the mission is to escalate it to 3 million barrels per day. This funding arrangement is a “a game-changer to oil and gas project financing in Nigeria”, according to the Group MD of NNPC.

The Federal Government is expected to earn more than $10.2bn in royalties and taxes from the project over the next 15 years, while NNPC would bag over $5bn after payment of the entire financing obligation.

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, specifying that the Financing and Technical Services Agreement was for a period of 15 years while the $3.15 bn ceiling funding would be provided by SEEPCO with a 10-year capital investment period and five years for cost recovery.

First production of about 7,900bpd is expected from the project by April 2020, while production is expected to skyrocket at 94,000bpd and 542mmscfd within four years.

In terms of local development, the project is most likely going to increase participation by indigenous companies in the industry by providing over 2,000 direct and indirect job opportunities.

Reporting for EasyKobo on Wednesday , 24 July 2019 in Lagos, Nigeria