Nigeria's foremost Online Energy News Platform

Why NNPC is seeking $4.1bn from Nigerian-based Oil Firms

The Nigerian National Petroleum Corporation (NNPC) and two oil companies in Nigeria are in talks over infusion of funds into NNPC that will be budgeted to develop oil leases that are operated by NNPC unit.

NNPC is negotiating a $4.1 billion investment from Lagos-based Sterling Oil Exploration & Energy Production Co. and CMES-OMS Joint Venture Ltd. NNPC intends to raise $3.15 billion and $991.1 million from Sterling Oil and CMES-OMS respectively.

In 2018, the state-owned oil company signed financing agreements of $2.3 billion with joint venture partners and other third parties, Bloomberg reported. Adding that NNPC also entered into an agreement worth $2 billion to fund gas projects with Nigeria LNG Ltd., Africa’s biggest gas liquefier.

Reason for $4.1 billion investment

NNPC is looking to increase its production level by next year. The $4.1 billion will be used to develop oil leases which hold more than 400 million barrels of crude reserves. NNPC’s production unit currently stands at 240,000 barrels per day (bpd), while Nigeria pumps about 1.78 million barrels of oil daily. The deal will enable NNPC to double its production unit to 500,000 barrels and increase daily gas production to 1.5 billion standard cubic feet by next year.

The report disclosed Nigeria’s state-owned oil company already made outstanding cash contributions worth $993.7 million by September, to joint venture partners including Royal Dutch Shell Plc, Total SA and Eni SpA, but NNPC still owes $3.95 billion in arrears.

Sterling Oil Exploration & Energy Production Co.

The Sandesara Group is a listed company in NSE and, BSE in India, Luxembourg in Europe and Singapore in SE Asia with some of the leading ventures like Sterling Biotech, PMT Machine Tools, Transworld Infotech, Iron and Coal ore mining, power plant, special economic zone (SEZ), deepwater port, gas retail stations in USA, logistics and infrastructure management etc. With business in more than 7 countries including India, USA, China, Japan and Europe with 29 offices. Sandesara Group has expanded the E and P portfolio from India to Nigeria in 2006 through another subsidiary Sterling Global Oil Resources Limited (SGORL) by signing a Production Sharing Contract (PSC) for OPL 277 Block with Government of Nigeria. SEEPCO has been awarded the OPL 280 Block and the PSC was signed on 23rd April 2007.

CMES-OMS Joint Venture Ltd

CMES-OMS JV is an indigenous Limited Liability Exploration and Production Company in Nigeria, with her parent companies well celebrated in local content EPC and oil field security solutions services to the Nigerian oil industry. The Company leverages her Global oilfield financing experience, coupled with 100% indigenous local content expertise in oil field infrastructure and security, to deliver bespoke solutions to clients that lead to asset enhancements via strategic alliances in hydrocarbon exploration, production, and safe distribution systems.

SOURCE: thisday