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Nigeria: Standard Chartered Leads NNPC/Mobil $220 Million Facility
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Daily Trust (Abuja)
25 July 2008
Posted to the web 25 July 2008
Jibrin Abubakar
Standard Chartered Bank in its strategic move to support Nigeria's Oil and Gas sector has struck a deal with 8 other Nigerian banks to provide $220m bank debt financing priced at Libor +275 bps for the National Nigerian Petroleum Corporation (NNPC) and Mobil Producing Nigeria's NGL II project.
A statement said the new debt, in the form of a 364 day bridge facility, was required to bring on-line the NGL II Project, which has already gone into the completion testing phase.
The transaction was advised, structured, and arranged by Standard Chartered Bank and funded by 8 Nigeria-licensed banks. It follows a package of combined sponsor equity and senior bank debt financing placed in 2004.
NNPC and MPN, have collaborated previously on the NGL I and Additional Oil Recovery (AOR) projects through their longstanding joint venture. NGL II is expected to increase oil recovery in AOR by 530 million barrels, process approximately 950 million scfd of rich gas, and achieve the production of 45,000 bpd of NGLs for fractionation into propane, butane, and pentanes.
With gas monetization becoming an increasingly important priority for the Government of Nigeria, the NGL II Project breaks ground on several key national strategic objectives and achieves an important financial milestone.
NGL II drives significant incremental revenues outside of the OPEC quota for Nigeria's Treasury and enhances oil production without the associated routine gas flaring. The project complies with Nigeria's twin goals of monetizing gas reserves by stripping NGLs from rich gas and of eliminating gas flaring of more than 300 million scfd. The lean gas will be available for future monetization. NGL II's construction also relied heavily on the use of Nigerian contractors and content.
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The transaction represented the first substantial oil and gas sector project financing in Nigeria funded exclusively by Nigeria-licensed banks: Oceanic Bank, United Bank for Africa, Standard Chartered Bank Nigeria, Access Bank, Skye Bank, Union Bank (Mandated Lead Arrangers) with Platinum Habib Bank and Zenith Bank (Lead Arrangers).
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