Projects expect to generate over $6.35bn in taxes and royalties

The Nigerian National Petroleum Corporation (NNPC) says that plans to increase crude oil production and grow the nation’s revenue profile gained momentum with the closure of $875.75m alternative financing deal for the Nigerian Petroleum Development Company (NPDC) operated OML 65 through the Funding and Technical Services Agreement with CMES-OMS Petroleum Development Company (CPDC).
 A release by NNPC Group General Manager, Group Public Affairs Division,  Ndu Ughamadu, stated  that the project, which scope cuts across exploration, development, production and provision of facilities with incremental first oil targeted for Q4 2020, was estimated to have potential reserves of 800 million barrels of oil equivalent (mmboe) with an ultimate recoverable reserve of 244 mmboe and cumulative production of 44mmboe from the Abura Main and Abura SE fields.
 the project is expected to generate over $6.35bn in taxes and royalties to the Federation to support Government’s medium to long term economic development agenda

 production at OML 65 will romp up from 900barrels per day to 60, 000 barrels per day with average production over field life at 40,000 barrels per day.
Throwing more light on the financing strategy, the Chief Financial Officer,  Umar Ajiya,  explained that the package entailed comprehensive financing solution that addresses the complex issues involved in growing NPDC’s production, minimizes its cost of capital, and maximizes its value preservation, adding that it also strikes a balance between risk and reward which gives investors a rate of return that is commensurate with funding a brownfield project which has significant exploration risk.
Umar  said the expectation was that the collaboration between 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, whilst maximizing value to all the stakeholders.

On CPDC’s right to provide technical services, the CFO listed the field of consideration in this regard to include: drilling and completion services; building capacity and technology transfer; generating employment opportunities for youths with attendant positive multiplier effect on the nation’s economy, among other considerations.

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