Seplat, NPDC Seeks N59 Billion To Fund Joint Venture (JV)

The Nigerian Petroleum Development Company Limited (NPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), and Seplat Petroleum
Development Company Plc are hoping to secure loan facilities up to a limit of $300m (N59bn) to fund joint venture cash calls, The Punch reports.

NPDC, which has several joint venture arrangements with other oil companies with regard to specific assets, has found the funding of its cash-call obligations to be a major challenge over the years. The company recently entered into strategic alliance agreements with Septa Energy andAtlantic Energy for the funding of some of the divested assets assigned to it by the NNPC in 2011.

Seplat on its own part, said it had
continued to fund the NPDC/Seplat JV despite being owed substantial sums in unpaid cash-calls from the NPDC. As such, while announcing its half-year results, it said, “The NPDC and Seplat have agreed to jointly source loan facilities, up to a limit of
$300m, to fund joint venture cash calls with effect from January 2015.”

Under the agreed structure, once such facilities are in place, the NPDC and Seplat would each contribute an allocation of crude oil production proportionate to their working interest in order to repay such loan
facilities, it said. “Consequently, the
company (Seplat) has engaged with
potential lenders to implement this
arrangement,” it stated.