Commodity prepayment facility 

Client  

NNPC

Project Value

$ 1.25 billion USD 

Project Duration

2016 - 2017 

Service Provided

Relationship Management; Capital Introduction

Overview

Africa's biggest oil producer and OPEC member was hit hard by the sharp drop in global oil prices in 2014 that pushed it into its first recession in 25 years. The country returned to growth-mode in the second quarter.

Already cash-strapped and weighed down by billions of dollars in old debts, NNPC (Nigerian National Petroleum Corporation) has also been looking to bring in outside cash. NNPC has had cash-flow problems for years and has been chronically behind payments for its stakes in upstream joint-ventures with Shell, Chevron, Total, Eni and ExxonMobil.

 

Rationale 

On the heels of the succesful NNPC/Chevron Accelerated Upstream Financing Programme which was led by Standard Chartered which was a $1.2 billion Joint Venture (JV) funding for the Nigerian National Petroleum Corporation (NNPC) and Chevron, which has a 60-40 per cent interest in the project respectively.

The deal is aimed at enabling incremental oil and gas production from a total of 36 wells, under the Oil Mining Licence (OML) 49, 90 and 95, both onshore and offshore. is expected to address the critical national issue of maintaining current production levels in the short term, as well as replacing depleting Nigerian reserves, which has been static at circa 35 billion in the last 10 years. Cassia was invited with its local partners to present to NNPC its credentials as the NOC looked elsehwere for more equity funding to address their internal capital calls specifically in their JV blocks with ENI. 

Solution 

Cassia working with an London based energy consulting firm assembled a consortium led by BP trading and private capital from the GCC to look and entering into a similar structure as the Accelerated Upstream Financing Programme and ultimatley were able to raise $1.25 billion USD from the consortium for the purpose of addressing NNPC's internal capital calls in their ENI JV blocks.