As a demonstration of support for the commercial and financial operations of Neconde Energy Limited, a consortium of 7 local and international lenders has signed an agreement to refinance the Company’s existing Senior Secured Medium-Term Loan Facility Agreement worth $640 million (about N2.3 trillion) with Neconde Energy Limited, an indigenous Oil and Gas Exploration and Production company, following the 20 year renewal of the Oil Mining License of the Company effective June 2019.
The consortium of 7 lenders is made up of 4 Nigerian Banks and 3 international lenders. The banks include Access Bank, Fidelity Bank, Zenith Bank as well as First Bank (UK) Limited. The international lenders include the Africa Import Export Bank (Afrexim), Africa Finance Corporation (AFC) and Glencore Energy (UK) Limited. Apart from being a member of the lending consortium, Glencore is also the off-taker of Neconde’s equity crude oil production. With the refinancing, Neconde is now positioned to achieve its field development plans for the Asset.
The Chairman of Neconde Energy Limited Dr. Ernest Azudialu-Obiejesi said in a statement that the loan refinancing affirms the strong financial fundamentals of Neconde Energy Limited as a leading player in the upstream sector of the Oil and Gas industry. He also disclosed that “this restructuring frees up capital for Neconde to invest in more development activities that will result in production increase’’.
Neconde is in a Joint Venture (JV) with the Nigerian Petroleum Development Company (NPDC) in OML 42. The JV’s Production presently stands at an average of 50,000bpd and upon completion of the development activities planned in the 2019 work program, the JV expects to hit a production output of about 100,000bpd.
In Q3 2018, Neconde alongside its Joint Venture partner, NPDC, secured a robust and independent alternative crude evacuation system. This initiative was borne out of the need to find a more reliable alternative to the Trans-Forcados Pipeline which is prone to repeated outages. The new evacuation system (“Barging”) has become the primary evacuation system for the JV and has since proven to be a more reliable and consistent channel of evacuating its crude oil for export. The JV intends to consolidate on this major achievement and improve its cash flows from the Asset.
In January 2011, Neconde participated in and emerged successful in the competitive bid for the acquisition of 45% stake in OML 42 previously held by a consortium of International Oil Companies (Shell, Total Exploration and Production Nigeria Limited and Nigerian Agip Oil Company Limited). Only recently it secured the renewal of its lease for OML 42 for a further tenor of 20 years.
Neconde’s status as an indigenous company with an excellent management team offers a viable option through which the rich reserves of the Niger Delta could be brought into production with attendant economic benefits for the local communities and the country.