He said the other partners are Energy Production Company Limited (SEEPCO) and the exploration and production arm of NNPC, the Nigerian Petroleum Development Company (NPDC).
He said that the move was part of the quest by the NNPC to increase the nation’s crude oil reserves and daily oil production to three million barrels per day.
OML 13 is 100 per cent owned by the NPDC and is located in the Eastern axis of the Niger Delta covering a total area of 1987km².
He said that the Group Managing Director (GMD) of NNPC, Malam Mele Kyari, had described the funding arrangement as “a game changer to oil and gas project financing in Nigeria”.
He expressed gratitude to President Muhammadu Buhari, for approving the transaction, adding that OML 13 held strong potential both for the petroleum industry and the nation’s economy.
Explaining the terms of the financing, Kyari disclosed that the Federal Government is expected to earn over 10.2 billion dollars in royalties and taxes from the project over the next 15 years.
Also NNPC would earn over five billion dollars after payment of the entire financing obligation.
The GMD advised the management of NPDC to develop a strong community engagement strategy to forestall any crisis that could hinder operations.
He disclosed that the acreage boasts of over 926 million stock tank barrels (mstb) and 5.24 trillion cubic feet (tcf) respectively of oil and gas reserves, adding that the Financing and Technical Services Agreement was for a period of 15 years.
According to him, 3.15 billion dollar ceiling funding will be provided by SEEPCO with a 10-year capital investment period and five years for cost recovery.
First oil of about 7,900bpd is expected from the project by April, 1, 2020 while production is expected to peak at 94,000bpd and 542mmscfd within four years.
On local content, the project is expected to enhance participation by indigenous companies in the industry by providing over 2,000 direct and indirect job opportunities.
The Chairman, Sterling Oil Exploration and Energy Production Company Limited, Mr Tony Chukwueke, expressed delight at the opportunity offered the company to support the production and reserves growth aspiration of the Federal Government.