The African Export-Import Bank (Afreximbank) has signed a reserve-based lending facility term sheet with Amni Petroleum, which it says will more than double the company's oil production while boosting gas exports and providing fuel for power generation.
Amni Petroleum, an independent Nigerian oil and gas company, will use the $635 million loan facility to finance capital expenditure in the Okoro and Tubu oil and gas fields in the eastern and south-eastern Niger Delta respectively.
The funds released are expected to help Amni Petroleum increase its oil production from about 10,000 barrels per day to 25,000 in 12 months, according to Afreximbank.
Rene Awambeng, director and global head of client relations at Afreximbank, says the deal will boost gas production for power generation across West Africa, presenting a cleaner alternative to coal or oil, and that the gas generated will also be exported as LNG.
"Tubu gas is a game changer. This funding will enable its full potential to be exploited and exported regionally and internationally. This will help to supply the West African sub-region with cleaner energy," says Awambeng.
Demand for domestic energy finance is increasing on the continent following efforts by Western countries to end foreign support for fossil fuels.
Earlier this year, GTR pointed out that African oil producers were pinning their hopes on the formation of a a new energy bank and in May, Afreximbank signed an agreement with the African Oil Producers Organisation to co-create the new entity.
Although gas generally produces less carbon emissions in energy production than other fossil fuels, its wider role in the transition to net zero is disputed.
Last week, the International Energy Agency reiterated its 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.