LEKOIL  Signs MoU with GE Oil and Gas

Lekoil and GE entered into a MoU for the development of a work program for Lekoil’s Ogo field on Nigeria’s OPL 310. Under the MoU Lekoil will leverage GE Oil & Gas’ equipment and technical expertise.

With the goal of launching its OPL 310 appraisal program,Lekoil is in discussions with potential partners for the block. The company plans to spud an appraisal well on OPL 310 by late-2017 or early-2018.

Following the successful completion of the appraisal phase, and subject to the fulfilment of a number of conditions including a positive well result, GE Oil & Gas, through a consortium SPV, and Lekoil through its funding partners, intend to invest funds towards the full field development capital of the project. Lekoil estimates this cost to be $400million for full field oil development and $600million for subsequent upstream gas field development.

GE Oil & Gas is expected to receive a percentage of Lekoil’s future cash flows from the Ogo Field, as well as the ability to supply its products and provide technical expertise throughout the life of the project.The company’s 40% participating interest in OPL310 will remain intact and unaffected by the terms of the MoU.

 

Source: Petroleum Africa

Lekoil secures $15M advance payment facility with Shell

Nigeria-based oil and gas company Lekoil has secured an advance payment facility of $15 million from Shell Western Supply and Trading Limited, a member of the Royal Dutch Shell group.

Lekoil said on Friday that the deal payment facility with Shell was agreed with its wholly owned subsidiary Lekoil Oil and Gas Investments Limited.

According to the deal, the facility has a maturity of three years and is repayable quarterly following a six-month moratorium with a market margin over the London Interbank Offered Rate (LIBOR). LIBOR serves as the first step to calculating interest rates on various loans throughout the world.

The payment facility is linked to the commercial offtake agreement between Shell and Lekoil for the sales of the Nigeria-based firm’s crude entitlement from the Otakikpo marginal offshore field. The field is located in a coastal swamp location in oil mining lease (OML) 11, adjacent to the shoreline in the south-eastern part of the Niger Delta.

To remind, the deal between the duo was signed on Thursday, March 30. According to terms of the deal, pricing will be determined at future spot market prices, net of marketing costs.

The offtake contract allows Shell to undertake the lifting of Otakikpo crude from the FSO Ailsa Craig. Lekoil expects the first lifting from the IMA Terminal to begin in early second quarter.

“We are pleased to be working with Shell as a commercial and financial partner to enable the continued development at Otakikpo,” said Lekoil’s CEO Lekan Akinyanmi in Friday’s statement.

He added: “The facility is a strong endorsement of our commercial production and secures funding which is non-dilutive to our shareholders. We believe that this relationship with a globally recognized oil and gas major will complement Lekoil in its long-term growth and aspirations.”

Offshore Energy Today Staff

Lekan Akinyanmi
CEO, LEKOIL

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