NNPC signs JV deals with Chevron, Shell

THE Nigerian National Petroleum Corporation (NNPC) has signed financing agreements with its joint venture partners to develop the Sonam and Santolina projects. 

The first deal, signed with Sonam JV partner Chevron Nigeria, will see Chevron provide around US$780m in funding to develop oil mining licences (OMLs) 90 and 91, which are thought to contain a total of around 211m bbl of oil and 1.9trn ft³ of gas. NNPC group managing director Maikanti Baru said at the signing ceremony in London that at peak production, the Sonam project will deliver 39,000 bbl/d of oil and 283m ft³/d of gas. It is expected to generate US$7.3bn in earnings.

 Around US$400m will fund the development of seven wells in OML 91 and the Okan 30E non-associated gas (NAG) well and associated facilities, including the Sonam NAG well platform, in OML 90. A further US$380m will be used to reimburse the project’s lenders. Chevron has already spent around US$1.5bn on the Sonam project, which is expected to begin production within 3­–6 months.

Under the terms of the second deal, Santolina JV partner Shell Petroleum Development Corporation (SPDC), Shell’s Nigerian subsidiary, will fund 156 development activities in 12 OMLs and 30 different oil fields in the Niger Delta. The project overall is expected to generate US$9bn in revenue.

Shell global upstream director Andy Brown said that the funding arrangement was an innovative financing plan that would enable SPDC to commence exploration activities that had stalled due to funding challenges.