London-based junior Sirius Petroleum has moved a step closer to being listed on the city’s Alternative Investment Market after a key deal was agreed with the Nigerian National Petroleum Corporation.
Last year, Sirius acquired a 30% stake in COPDC Petroleum Development Company, which has an agreement with NPDC, an NNPC subsidiary, to operate Oil Mining Licence 65.
COPDC has now received approvals from NNPC that allow it to begin the drawdown of financing to start development work in the onshore tract.
Under the terms of a deal with NPDC, COPDC will receive immediate cash flow entitlements on assuming operational responsibility for existing production.
Initial plans call for further development of the producing Abura oilfield, involving the drilling and completion of up to nine development wells, with the aim of exploiting more than 16 million barrels of proven and probable resources.
Abura is currently producing about 10,000 barrels per day, an amount set to hit 21,000 bpd after the drilling programme.
Sirius has a master services agreement with Baker Hughes relating to OML 65, with the contractor providing drilling and integrated well services.
Early this year, Sirius agreed a $200 million facility with Trafigura, some $15 million of which will be deployed during initial OML 65 operations.
OML 65 also contains two further discoveries — Owopele and Osioka — holding about 35 million barrels of proven and probable reserves that could be tapped at a later date.
Abura, Owopele and Osioka also house 27 million barrels of combined possible resources, while two deep prospects could contain some 91 million barrels.
OML 65’s existing production facilities and infrastructure can handle up to 40,000 bpd.
Bobo Kuti, chief executive of Sirius, said: “We have assembled a world class team of joint venture, financing and operational partners working together with NPDC on the OML 65 project in Nigeria and look forward to commencing the work programme for the first phase of this major development for all stakeholders.
“This is an important asset for the company, with immediate cash flows and significant upside potential for all stakeholders.”
Kuti added that “we can now look forward to progressing… the listing of the company’s shares on the London AIM market this year”.