Nigeria to earn $5.60 billion from new oil deal, says NNPC
• ‘Pact to generate $1.32 billion in net cash flows’
• NEITI discloses recoverable revenues hit N7.2tr
The Nigerian National Petroleum Corporation (NNPC) has said that a new financing and technical services pact between corporation, First E&P Joint Venture and Schlumberger for the Anyalu and Madu Oil Field will enable Nigeria generate about $5.60 billion taxes and royalties.
Though discussions had reached the final stage on the tripartite term sheet since last year, 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.
Baru, at the signing ceremony, said in arriving at the innovative alternative funding package, the corporation was guided by the need to instil transparent and accountable processes.
He further added that NNPC also 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.
He said 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.
In another development, Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed recoverable revenues in excess of $20 billion (N7.2 trillion) in the oil and gas sector over the past years.
NEITI said that the recoverable revenues were from process lapses leading to under-assessment or under-payment of taxes, royalties, signature bonuses and others.
Executive Secretary of NEITI, Waziri Adio, said this in his presentation to the board at the organisation’s meeting in Berlin, Germany.
He said NEITI’s operations in the oil and gas sector in Nigeria had so far led to recovery of revenues in excess of $3 billion (N1.08 trillion) from companies to government coffers.
Adio further said that through regular publications of credible and accessible critical data, NEITI had succeeded in opening up previously opaque sector to public scrutiny, thus increasing citizens’ demands for reforms.