Oil Deal: Nigeria to earn $5.60 billion

Abiodun Oba |

Nigeria will generate about $5.60 billion taxes and royalties from a new financing and technical services pact between corporation, First E&P Joint Venture and Schlumberger for the Anyalu and Madu Oil Field.

The Nigerian National Petroleum Corporation (NNPC) Group Managing Director of NNPC, Maikanti Baru, said the fields under Oil Mining Licence OML 83 and OML 85, offshore Nigeria, received a final nod at the weekend in London.

Under the agreement, global oil services giant, Schlumberger, would provide $724.14 million out of the required project cost of $1.082 billion while the balance of $358.79 million is to be funded with cash flows generated by the project.

According to the GMD, the pact would enable the country to generate $5.60 billion in taxes and royalties and $1.32 billion in net cash flows after Schlumberger’s cost recovery & compensation in line with the terms of the agreement.

The Anyala and Madu fields are projected to have 193 million barrels of crude oil and 0.637 trillion cubic feet of proven gas reserves with production plateau of 50,000 barrels of oil per day and 120 million standard cubic feet of gas per day.

At the signing ceremony, the GMD said in arriving at the innovative alternative funding package, NNPC was guided by the need to instil transparent and accountable processes.

He further added that the corporation followed strict compliance with all extant laws, regulations and established governance protocols as well as over-riding national interest and drive to achieve competitive market pricing for such a greenfield project.

According to Baru, the Schlumberger financing package covers pre-Final Investment Decision (FID) funding, 100 per cent of capital expenditure for three years and pre-production operating expenses.