Nigeria to tap alternative financing options for its JV operations
Bukola Odufade is Businessamlive Reporter.
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August 7, 20181.4K views0 comments
Nigeria is looking into alternative financing options to fund its Joint Venture (JV) obligations as the state owned oil company looks to revamp the oil and gas industry.
According to Maikantu Baru, group managing director of Nigerian National Petroleum Corporation (NNPC) who spoke at the ongoing society of petroleum engineers’ conference in Lagos, Nigeria had raised funds utilizing equity or self-funding from cash-flow, commercial debt instrument or partner funding in form of carry or modified carry arrangement (MCAs), but was interested in non-traditional funding options.
“To turn the wheel of the industry and ensure that funding doesn’t limit our growth, it is important we consider both the traditional and non-traditional funding options,” Baru said.
Some of the non-traditional funding options, he explained, include contractor-financing/deferred payment, pension funds, private equity, sovereign wealth funds, export credit agencies (ECAs) and islamic/sharia finance.
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He also noted that alternative financing had deepened local banks’ participation in the upstream sub-sector of the industry and that deep-water production sharing which currently accounts for 41 percent of daily national production has risen over the years, with over 2000 percent production growth recorded within the last ten years.
“There is need to sustain the Industry for it to continue to deliver the much needed revenue and provide the springboard for economic diversification. We must therefore keep the goose which lays the golden egg alive,” Baru added.