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