- NNPC Seeks Capital Market Funds for Oil Projects
The Nigerian National Petroleum Corporation is planning to raise money from the capital market to finance oil projects across the country.
The Federal Government on Tuesday also declared that crude oil would remain useful for a long time despite the use of electric cars in some parts of the world.
The government stated that the number of upstream oil rigs in Nigeria increased from about five to 21 within two years.
The Minister of State for Petroleum Resources, Ibe Kachikwu, and the Group Managing Director, NNPC, Maikanti Baru, disclosed these at the ongoing 2018 Nigeria Oil and Gas Conference in Abuja.
Baru, while speaking on plans by the national oil firm to increase investments in the oil sector, stated that the corporation was seeking more funds to develop oil projects in the country.
He said, “To spur the much needed investment, the government has issued an updated oil and gas policy and initiated the process for enacting a new Petroleum Industry Governance Bill that provides clarity to government institutions and their roles in the industry.
“We plan to be in the capital market to raise more finance for new oil and gas projects such as the NNPC/NAOC JV (Nigeria Agip Oil Company Joint Venture), South Gas Project, North Gas Project and Central Gas Project, and the NNPC/TEPNG JV, among a host of other projects.”
He noted that the oil firm had earlier signed financing agreements of about $2.5bn for different projects, adding that the NNPC’s outlook was to grow the country’s crude production to three million barrels per day.
Baru said, “We have signed third party financing deals with international banks for new oil and gas developments. In 2017 alone, about $2.5bn alternative financing arrangements were signed for the NNPC/SPDC Joint Venture, NNPC/Chevron JV, Project Falcon and the NNPC E&P JV and Schlumberger oil finance deal.
“The outlook for 2018 and beyond is to increase crude oil reserves by a billion barrels at least on a yearly basis. So, we want to move the crude oil reserves from 37 billion barrels to 40 billion barrels by 2020, roughly adding two billion barrels new reserves yearly, and also increase national crude oil production to three million barrels per day.”
Kachikwu had earlier in his address stated that the use of crude oil would continue for a long time irrespective of the presence of electric cars in some parts of the world.
He, however, noted that the most important thing would be the overall impact of crude on the Nigerian economy.
Kachikwu said, “The oil industry is at a very critical stage in its life cycle, and don’t worry about all the nuances you hear about oil going out of stock. The reality is that even when people point to electric cars, quite frankly they still represent only about two per cent, but oil demand continues to increase.
“So, the reality is that more oil is continually found by the day. So, there is enough reason to feel that oil will be there for a long time, but the performance within the oil sector will differ, for it is not how long it lasts but the value it brings to the populace, the owners of the resource.
“It is how we are able to utilise whatever we find to immediately criss-cross other development sectors of this economy, such that by the time it finally filters away, we will have an environment that would have indeed benefitted substantially from oil.”
Kachikwu said it was time for Nigeria to sustain and firm up regional adherence to its kind of crude considering the rise in the sale of shale oil by the United States, as this had heightened crude oil competition in the international market.
He said Nigeria had been increasing its crude barrels, adding that the country had 36.18 billion barrels of proven reserves of crude oil and condensate as of the first quarter of 2018.
He stated, “There are about 80 open acreages currently under review to enhance the prospects in the sector. There are huge FIDs (final investment decisions) in the horizon, like the Bonga South-West and the Zabazaba.
“Our upstream rig counts have increased tremendously to about 21 as of first quarter of 2018; and when you compare that to 17 as of 2017, and indeed almost below five as of 2015, you’ll realise that dramatic progress is being made.’
He added, “Our current production level is roughly between two million and 2.15 million barrels per day, and this means we have relatively established a production baseline that is stable. So, the stability in the Niger Delta has helped, but it continues to be a potential danger area.
“Today, we have about 46 E&P (exploration and production) companies producing from over 180 fields as of the end of 2017 and 55.6 per cent of the production comes from joint venture portfolio.
“About 35 per cent comes from PSCs (production sharing contracts), six per cent from sole risks and three per cent from marginal fields.”