Chevron and Nigerian National Petroleum Corporation have inked a joint venture deal worth approximately $1.7 billion. About 92% of the joint venture project is almost complete. Financed in two phases, third parties have provided funding to the tune of $780 million.
In the deal’s first phase, Nigerian commercial banks provided $400 million while $380 million was provided by global commercial banks in the second phase of the deal. Nigerian National Petroleum Corporation is expected to contribute $468 million to the project while Chevron Corporation will contribute $312 million.
Natural gas production
The focus of the project is natural gas production from Okan and Sonam fields located in the Niger Delta. The deal will see the two firms finalize the construction of a pipeline in Sonam as well as living quarters. Additionally the two firms will develop a pig receiver in Okan as well as other associated facilities. Seven wells will also be dug in Sonam as well as in Okan. At present the facilities have been fully completed while digging of the wells is 40% complete.
As one of the largest oil producing countries on the African continent, Nigeria constitutes a substantial portion of Chevron’s total upstream production volumes. The most populous country in Africa also accounts for a significant portion of Chevron’s international asset base. Chevron’s stake in Sonam and Escravos Gas Plant is 40%. Among many others the oil major also has stakes in Owowo oil prospects, West African Gas Pipeline Usan and Escravos Gas-to-Liquids facility.
Though the development projects Chevron has initiated in Nigeria are being done with the aim of boosting output and consequently exports, the rising militantism and plummeting oil prices have caused a decline in production and revenue. This has posed a risk to the operations of Chevron in the country. There is hope however as the government is engaged in peace talks in order to arrest the situation. In 2016 the Nigerian operations of Chevron Corporation had an output of 235,000 barrels per day.
This comes a little over a week since Chevron indicated that it would push for a business environment which respects human rights in Myanmar following criticisms of the oil major’s association with a regime that the United Nations has accused of engaging in ethnic cleansing.
“We will continue to work with other US companies and the government to promote the value of US investment in Myanmar and the need to foster a business environment that respects human rights,” Chevron said in a statement.