The African Export-Import Bank (Afreximbank) and Amni Petroleum have agreed to a reserve-based credit facility term sheet that, according to Afreximbank, will increase the company’s oil production by more than doubling while also enhancing gas exports and providing fuel for electricity generation. The US$635 million financing facility will be used by Amni Petroleum, an independent oil and gas firm in Nigeria, to finance capital expenditures in the Okoro and Tubu oil and gas fields, which are situated in the eastern and southern Niger deltas, respectively.
According to Afreximbank, the funds released are anticipated to assist Amni Petroleum in increasing its oil production from an estimated 10,000 barrels per day to 25,000 barrels per day within a year.
Rene Awambeng, director and global head of client relations at Afreximbank, says the deal will boost production of gas for use in power generation across West Africa, presenting a cleaner alternative to coal or oil, and that the gas generated will also be exported in the form of LNG.
“The tubu gas is a game changer. This funding will allow for its full potential to be exploited and exported at the regional and international level. It will help supply the West African sub-region with cleaner energy,” says Awambeng.
Demand for domestic energy financing is growing on the continent after efforts by Western countries to halt overseas support for fossil fuels.
Earlier this year, GTR reported that African oil producers were pinning hopes on the formation of a new energy bank, and in May, Afreximbank signed an agreement with the African Petroleum Producers Organization to co-establish the new entity. Although gas generally produces lower carbon emissions in energy generation than other fossil fuels, its role in the transition to net zero is disputed.
The International Energy Agency last week reiterated calls for an immediate halt to all new fossil fuel infrastructure projects, including oil and gas exploration, in order to limit global warming to 1.5°C.
