Schlumberger Takes FID in Nigeria Project
A final investment decision (FID) has been announced July 2 on Schlumberger's tripartite agreement with Nigerian National Petroleum Corporation (NNPC) and First Exploration & Production.
Under the agreement, which was reached in London June 29 2018, global oil services giant Schlumberger is to provide $724.14m out of the required $1.082bn project cost, while the $358.79m balance is to be funded with cash flows generated by the project. The agreement is for the development of the Anyalu and Madu fields on OML 83 and OML 85, offshore Nigeria. The Schlumberger financing package covers pre-FID funding, 100% of capital expenditure for three years, and pre-production operating expenses.
The Anyala and Madu fields are projected to have 193mn barrels of crude oil and 0.637 trillion ft3 of proven gas reserves. Production plateau of 50,000 b/d and 120mn ft3/d is expected.
Nigerian state-owned NNPC's group managing director Maikanti Baru, present at the signing, said all parties involved complied with the rules and regulations for such a venture. He said the NNPC/First E&P project financing represents a creative approach to funding joint venture operations in response to the context of Nigeria's operating environment, and would help ramp up production.
According to Baru, the package would enable the country to generate $5.6bn in taxes and royalties and $1.32bn in net cash flows after Schlumberger's cost and profit recovery under the agreement.
In 2017, NGW reported signature of the tripartite agreement by NNPC, First E&P and Schlumberger for the Anyala/Madu development; Schlumberger then expected to invest $700mn in the project. FID was to have been taken by end-2017, but the project was delayed. However a revised target set of June 2018 has now been met. Operator First E&P retains a 40% interest in OML 83/85 while NNPC has 60%.