For conceptualising, structuring and delivering an oversubscribed deal in a challenging macro-economic environment, the Joint Finance Team of the Nigerian National Petroleum Corporation (NNPC) and its Joint Venture Partners, Chevron Nigeria Ltd, have clinched the prestigious Thomson Reuters /PFI Magazine 'Africa and Middle East Oil Deal of the Year Award 2015'.
The global award, which is one of the most prestigious in the international financing market, is based on feedback from peers and market operators with full endorsement by the judges at Thomson Reuters/PFI.
Meanwhile, the Minister of State for Petroleum, Dr. Ibe Kachikwu, has expressed optimism that the oil price will rebound and end the year between $40-$50 per barrel as Brent crude traded briefly below $30 per barrel on Tuesday for the first time in 12 years.
However, the minister warned that for that to happen, there is the need to instill discipline among the 12-member states of the Organisation for Petroleum Exporting Countries (OPEC).
Speaking on CNN yesterday, Kachikwu explained that, with most OPEC member countries calling for a cut in production, the big producers could no longer resist and ignore the needs of other countries, adding that maintaining discipline among OPEC countries could convince non-OPEC producers like Russia to also cut output.
He said, "There is a lot of energy around the issue and with most of the member countries, not necessarily in terms of production strength calling for action, I do not think others would resist.
"We have to balance the need to maintain market share and the need to keep the companies, and countries which own these companies in business," he maintained.
A seven-day slide in prices fueled by concerns about continuing supply glut and slowing demand from China has wiped out almost 30 per cent from crude value this year and 70 per cent since mid-2014.
The NNPC, in a release yesterday by its spokesman, Ohi Alegbe, explained that the award is in recognition of the novel $1.2 billion multi-year drilling financing package for 36 Offshore/Onshore Oil wells under the NNPC/CNL Joint Venture initiated under the Accelerated Upstream Financing Programme executed at a signing-ceremony in London in September 2015.
The initiative, according to the statement, was designed by the NNPC to address the perennial challenge experienced by the federal government in its counterpart funding of JV upstream activities.
Code-named Project Cheetah, the $1.2bn alternative financing package was the first to combine funding of both oil production as well as domestic gas to support power generation in Nigeria from a medley of carefully sequenced offshore and onshore wells.
The deal is projected to fund 36 wells and deliver 41, 000 barrels of crude oil per day with a projected peak incremental production of 127 million standard cubic feet of gas per day (mmscfd) in the years ahead.
Also, the package is projected to generate between $2 and $5 billion of incremental revenues to the Nigerian government over the life of the project, subject to prevailing oil price in the upcoming years.
The funding package is being financed by a consortium of Nigerian and international lenders, led by Standard Chartered Bank and UBA.