LEKOIL the Africa-focused oil and gas exploration, development and production company, is pleased to announce that the Otakikpo Joint Venture between Green Energy International Limited (“GEIL”) and LEKOIL (with LEKOIL as Technical Partner) has sanctioned Phase Two of the Otakikpo field development plan, following the successful completion of an independent third party competent persons report (“CPR”), and technical and environmental, social, health and safety (“ESHS”) due diligence, commissioned and undertaken by Standard Chartered Bank. Following the project sanction, the JV is now finalizing heads of terms with “Anchor” engineering, procurement, construction and commissioning vendors for cost and schedule certainty to allow Standard Chartered Bank to close project financing as well as complete preparation for project execution. The Joint Venture has also renewed the Otakikpo Marginal Field license for twenty (20) years, following the payment to the Department of Petroleum Resources (DPR) the sum of US$1 million for the license Renewal fee (US$400,000 net to LEKOIL). After evaluating the existing infrastructure at Otakikpo , Schlumberger, in its role as nonfinancial, technical partner has assessed the capacity of the infrastructure to be capable of producing 10,000 bopd (4,000 bopd net to LEKOIL Nigeria) and, with some debottlenecking, up to 12,000 bopd gross (4,800 bopd net to LEKOIL Nigeria). Subject to closing of, inter alia, the project financing, the Joint Venture expects the first two wells of the phased development plan to bring production up to this level. The Joint Venture anticipates adding this incremental production by year end 2020. As announced on 1 July 2019, the Joint Venture signed a non-binding Memorandum of Understanding(“MOU”) with Schlumberger and a trading subsidiary of a major international oil company that has been operating in Nigeria for more than half a century (“Major Oil Company”). The MOU covers a comprehensive infrastructure sharing and drilling program around a group of marginal field assets in OML11. Under the terms of the MOU, the Major Oil Company will provide funding to the Joint Venture alongside the other funding partners, subject to completion of due diligence which is ongoing, entry into definitive documentation and final investment decision. The Joint Venture will seek to enter into an exclusive off take agreement with the Major Oil Company for the sale of crude produced pursuant to this project. The consortium of GEIL, LEKOIL and Schlumberger will form a multidisciplinary project management team in which Schlumberger will act solely as a technical partner to provide oilfield services and project management services to assist in ramping up production and long-term field management. The project scope also involves the construction of a terminal for evacuation. Financing discussions are progressing, with interest confirmed from key potential financing parties and further announcements will be made in due course. Otakikpo Oilfield Otakikpo is sited in a coastal swamp location in oil mining lease (OML) 11, adjacent to the shoreline in the southeastern part of the Niger Delta. LEKOIL Nigeria exercises the rights and benefits of its 40% Participating and Economic interest in Otakikpo via the Farm-in Agreement and Joint Operating Agreement signed on 17 May 2014 with Green Energy International Limited (“GEIL”), the Operator. The Company holds 90% of the economic interests in LEKOIL Nigeria. LEKOIL Limited’s economic interest in Otakikpo therefore equates to 36%. The Otakikpo Joint Venture began operations in December 2014. Ministerial consent was granted by the Honourable Minister of Petroleum Resources of Nigeria in June 2015. Commercial production started in February 2017.