Nigeria signs $3.1 bln funding deal with Shell

In Hungary

Nigeria signed a $3.1 billion deal with the local arm of Royal Dutch Shell on Monday to plug a funding gap in their joint venture projects, the country’s state oil firm NNPC said.

Under the deal, Shell would cover a $1.3 billion shortfall in NNPC’s share of the 2008 joint venture budget and provide an extra $1.8 billion loan to cover outstanding payments from 2006 and 2007, NNPC said in a statement. The agreement is the third such deal between the world’s eighth-biggest oil producer and its joint venture partners to try to end chronic funding shortfalls in the industry which have delayed projects and depressed output. “The money will be used to finance their upstream joint venture projects,” the statement said. It said the $1.8 billion loan would mostly be used to settle payments due to local contractors and suppliers.

This is the third such deal struck between Africa’s biggest oil producer and its joint venture partners in 10 days. It signed a $2 billion deal with Exxon Mobil last Monday, days after striking a similar $1 billion agreement with French energy group Total. NNPC hopes the deals will help Nigeria unlock significant shut-in output potential and has said they will help ensure the country meets or exceeds its OPEC quota -- currently 2.2 million barrels per day -- over the next one to two years. (Reuters)

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