NNPC Signs $875.75m Deal to Boost Oil Production

By Adedapo Adesanya

The Nigerian National Petroleum Corporation (NNPC) has signed an agreement worth $875.75 million with Nigerian Petroleum Development Company (NPDC) for funding and technical services agreement and alternative financing deal for the Oil Mining Lease (OML) 65.

The disclosure, made known by the NNPC spokesman, Mr Ndu Ughumadu in the nation’s capital, Abuja on Sunday, said the corporation signed the deal with CMES – OML Petroleum Development Company (CPDC)

The agreement which was co-signed by Mr Umar Ajiya, the Chief Financial Officer of the corporation, required comprehensive financing solution that will address the complex issues involved in increasing the NPDC’s production.

The agreement would enable the CMES-OML Petroleum Development Company (CPDC) to minimize its cost of capital and drive its value preservation.

According to the CFO, the project was expected to upgrade the level of production at OML 65 from 900 barrels per day to 60,000 barrels per day, with average production over field life at 40,000 barrels per day.

Speaking on CPDC’s right to provide technical services, Mr Ajiya listed that this would include – drilling and completion services; building capacity and technology transfer; generating employment opportunities for youths.

“This would have an attendant positive multiplier effect on the nation’s economy, among other considerations,” Mr Ajiya said.

He also noted that the expectation was that the collaboration between the NPDC and CPDC would translate in real terms to the efficient execution of the scope of activities for the optimal development of the OML 65 asset within cost and schedule, while maximising value to all the stakeholders.

In another event relating to the company, the corporation said that the nation’s three refineries located in Port Harcourt, Warri and Kaduna will refine crude oil at optimum capacity come 2022 as full rehabilitation will commence in January 2020.