By Udeme Akpan
A consortium of seven local and international lenders has signed an agreement to refinance Neconde Energy Limited, existing Senior Secured Medium-Term Loan Facility Agreement worth $640 million, following the 20 year renewal of the Oil Mining License of the Company effective June 2019.
In a statement sent to Vanguard yesterday, Neconde Energy Limited said that the consortium is made up of four Nigerian Banks and three international lenders, including Access Bank, Fidelity Bank, Zenith Bank as well as First Bank (UK) Limited, adding that the international lenders also include the Africa Import Export Bank (Afrexim), Africa Finance Corporation (AFC) and Glencore Energy (UK) Limited.
The company disclosed that apart from being a member of the lending consortium, Glencore is also the off-taker of Neconde’s equity crude oil production.
It stated that with the refinancing, Neconde is now positionedto achieve its field development plans for the Asset.
The Chairman of Neconde Energy Limited Dr. Ernest Azudialu-Obiejesi, said in the 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 stated: “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.