Nigeria's oil firm NNPC said Sunday it had signed a deal with a consortium of local and foreign lenders to develop 36 oil wells that would also boost domestic power generation in Africa's largest crude producer.
NNPC has secured "a $1.2 billion multi-year drilling and financing package for 36 offshore/onshore oil wells," the firm said in a statement.
The NNPC said the deal signed in London at the weekend would swell the country's coffers and help to maintain current production levels as well as replace depleting reserves. Oil accounts for more than 90 percent of Nigeria's foreign exchange earnings but the nation's economy has been badly hurt by the fall in global oil prices since mid-2014.
The new government of President Muhammadu Buhari, which came to power in May, said it inherited an "almost empty" economy and is struggling to pay its bills. Nigeria is Africa's largest oil producer, exporting some two million barrels per day and has crude reserves of 37.4 billion barrels. The NNPC said the 36 oil wells would be developed in two stages from 2015 to 2018. "Stage one comprising 19 wells is projected to deliver 21,000 barrels of crude oil and condensate per day alongside 120 million standard cubic feet of gas per day (mmscf/d), over 2015 and 2016," it said. "Stage two, comprising 17 wells, is projected to yield 20,000 barrels of crude oil and condensate per day alongside gas production of seven mmscf/d between 2016 and 2018," it added. The NNPC said the project would generate between $2 to $5 billion in revenue to cash-strapped Nigeria. Beyond the contribution to the national treasury, the projected gas production - the electricity equivalent of 400 megawatts - "would help boost the federal government's domestic gas aspirations with ... (a) positive effect on power supply," it added.