Investment company Sirius Petroleum has entered into a $10 million revolving pre-payment facility and commercial offtake agreement for the sales of crude oil produced from Nigeria’s Ororo offshore field with BP.
Sirius entered discussions with BP regarding an offtake and pre-payment facility to support the financing of the company’s proposed drilling program on the Ororo field in mid-June.
The investment company said on Monday that the deal has now been signed with BP Oil International, a subsidiary of oil major BP.
The agreement enables Sirius to draw down up to $10 million, in pre-payment finance following the beginning of production from the Ororo field. The company said that the interest rate on any pre-payment amount drawn down would be charged at Libor +9 percent per annum and will be repaid from crude oil sales.
Sirius added in Monday’s statement that it could request that BP provides pre-payment finance for either or both of the first two cargoes of crude oil, each for up to $10 million, scheduled to be lifted in 500,000 barrel parcels or more.
The pre-payment facility will be conditional upon the Ororo field achieving certain daily production levels, which are lower than the flow rates previously achieved by Chevron on Ororo 1, which have been underpinned by the recent competent persons report.
Bobo Kuti, CEO of Sirius, said: “The revolving prepayment facility and offtake agreement with BP supports the multi-well campaign on the Ororo field. It underpins our strategy to develop Ororo along with our world class oil field service partners COSL, Schlumberger, and Add Energy. In addition, the relationship with BP will enhance our development programs in Nigeria going forward.”
The Ororo field, discovered in 1986, is located within OML 95 in shallow waters offshore Ondo State. The field lies in water depths ranging between 23ft and 27 ft.
Guarantee Petroleum has a 55% participating equity interest in the Ororo field with Owena Oil & Gas as its partner holding the remaining 45% interest. Sirius Petroleum acts as the technical and financing partner in the development of the field.