TheCable

The Nigerian National Petroleum Corporation (NNPC) says it has secured a $1.2 billion deal for the developing of 36 oil wells, which will boost domestic power generation.

This was contained in a statement signed on Sunday by Ohi Alegbe, spokesman of the corporation.

Alegbe said the NNPC and Chevron executed the deal at a signing ceremony in London, saying  the money would be channelled into the development of 23 onshore and 13 offshore oil wells in two stages over 2015 to 2018.

He said the fund was designed to supplement the federal government’s cash call commitment in the oil and gas sector.

“The funding package, which is being financed by a consortium of Nigerian and International lenders, is an integral part of the accelerated upstream financing programme initiated by NNPC,” the statement read.

“The initiative would also help in the maintaining the current production levels in the short term as well as replace depleting reserves.

“The stage one of the project, made up of 19 oil wells, was projected to deliver 21,000 barrels of crude oil and condensate per day. The first stage would also lead to the production of 120 million standard cubic feet of gas per day (mmscf/d) over 2015 and 2016.

“Stage two of the project, which comprised of 17 wells, is projected to yield 20, 000 barrels of crude oil and gas production of seven mmscf/d between 2016 and 2018.”

The statement added that both stages of the project were envisaged to generate up to two to five billion of incremental revenue to the federation account.

“Beyond the contribution to the national treasury, the projected peak incremental gas production of 127mmscf/d, which is the electricity equivalent of 400 megawatts, would help boost the federal government’s domestic gas aspirations with expectant positive effect on power supply,” it stated.

The statement also quoted Ibe Kachikwu, group managing director of the NNPC, as saying the entire process will be made transparent.

“NNPC would not relent in the renewed effort to restore probity and transparency to the process of generation, collection and remittance of crude oil proceeds.

“I have always believed that issues of federation accounts must be left sacrosanct and not to be toyed with. The accelerated upstream financing programme is designed to help us achieve this objective.”