Nigeria’s state oil firm eyes capital market to fund at least 8 new projects

The Nigerian National Petroleum Corporation (NNPC) is set to hit the Capital market to fund its new projects, which include the NNPC/NAOC JV Idu-Re-development, South Gas Project, North Gas Project and Central Gas Project.

Maikanti Baru, group managing director of the corporation, disclosed this at the ongoing Nigeria Oil and Gas Strategic Conference and Exhibition (2018 NOG) in Abuja themed “Driving Nigeria’s Oil and Gas Industry Towards Sustained Economic Development and Growth”.

Baru explained that funds from the capital market would also be used to develop the NNPC/TEPNG JV’s Ikike Project, NNPC/SPDC JV Southern Swamp and Associated Gas Solution Step 2 Project, among others.

“We intend to sanction the multibillion US dollars Bonga South West/Aparo (BSWA) project as soon as we conclude an agreement on the heads of terms with SNEPCO on the various pending PSC arbitration disputes. This will jump start the resolution of all the other PSC arbitration disputes,” Baru stated.

On the state of gas affairs in the country, the GMD said the current daily domestic gas demand had attained an unprecedented level of 4,000 million standard cubic feet of gas per day, which is still expected to grow exponentially to about 7,500mmscfd in the next five years.

He stated that within next three years, NNPC, in collaboration with its joint venture partners, is committed to increasing natural gas availability from 1.5bscf/d to about 5billion standard cubic feet per day in 2020 to generate up to 15GW of electricity as well as stimulate gas-based industrialization.

Baru noted that the NNPC would continue to progress with its Seven (7) Critical Gas Development Projects (7CGDP), which have been established to deliver about 3.5bscfd of gas to the domestic market by 2020.

He reiterated that the NNPC had sanctioned the $2.8 billion 614Km Ajaokuta-Kaduna-Kano (AKK) pipeline project as a demonstration of its commitment to developing structured gas architecture across the length and breadth of Nigeria as part of NNPC’s priority in the medium to long term.

In the midstream section of the industry, Baru submitted that there were ongoing discussions to revamp the four local refineries by utilising private capital in form of contractor-financing model, adding that this represents a shift in NNPC’s investment model, redefining the commercial framework for midstream investment in Nigeria.

“Within the new model, investors would be repaid from incremental production of the refineries on prior agreed terms”, he explained.

Baru said the NNPC believed that the downstream sector holds the future, saying that the plan to become a net exporter of refined products by year-end 2019 is on course.

The GMD maintained that the outlook for 2018 and beyond for the NNPC was to increase crude oil reserves by 1billion barrels year-on-year from the current 37billion barrels to 40billion barrels by 2020 and also increase National oil daily production to 3 million barrels per day.

He assured that the Federal Government would continue to emplace policies that would grow production volumes and reduce contract approval time to guarantee efficiency in the petroleum sector.

On his part, Mohammed Sanusi Barkindo, the secretary general of the Organisation of the Petroleum Exporting Countries (OPEC), stated that the landmark “Declaration of Cooperation,” by 24, now 25 oil producing nations has accelerated the stabilization of the global oil market through voluntary production adjustments of around 1.8 mb/d.

He explained that the 174th meeting of the OPEC Conference and the 4th OPEC and non-OPEC ministerial meeting had reaffirmed the partners’ resolve to act in the interests of producers and consumers, stating that participating countries agreed to a 100 per cent conformity level.