The Nigerian National Petroleum Corporation (NNPC) will be heading to the capital market to raise more funds to execute new oil and gas projects it had scheduled in 2018 and beyond, its Group Managing Director, Dr. Maikanti Baru, has disclosed.
Baru said the corporation, which reportedly signed about $2.5 billion alternative funding arrangements in 2017 to undertake joint venture (JV) projects, which included the $1 billion as the Project Santolina with Shell Petroleum Development Company (SPDC); $780 million JV with Chevron Nigeria Limited (CNL) Project Falcon; and NNPC/First E&P JV and Schlumberger worth $700 million, would make efforts to raise money for JV projects it has with other international oil companies (IOCs) in the country.
“We plan to be in the capital market to raise more finance for new oil and gas projects such as the NNPC/NAOC JV Idu-Redevelopment; South Gas Project; North Gas Project and Central Gas Project.
“NNPC/TEPNG JV’s Ikike Project; NNPC/SPDC JV Southern Swamp and Associated Gas Solution Step 2 Project amongst a host of other new projects,” said Baru, in his address at the ongoing 2018 edition of the annual Nigerian Oil and Gas (NOG) Conference and Exhibition in Abuja.
He further stated: “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 also explained that Nigeria’s demand for gas was growing at an unprecedented rate, and that the corporation intended to take advantage of the growth by increasing its gas production.
“In terms of gas production, the domestic demand for gas in Nigeria is unprecedented, with a current daily realistic gas demand of 4,000mmscfd which is expected to grow exponentially to about 7,500mmscfd in the next five years.
“However, within the next three years, with our JV partners, we are committed to increasing natural gas availability from the current 1.5bscf/d to about five billion standard cubic feet per day in 2020.
“Consequently, the government will supply enough gas to generate up to 15GW (15,000 megawatts) of electricity to the power sector by 2020 and stimulate gas-based industrialisation,” he explained.
According to him, development of gas infrastructure and firm supply agreements will continue to be prioritised with the World Bank Partial Risk Guarantee (PRG) expected to remain in place to provide securitisation for gas revenues.
On the gas export market, he stated that part of the corporation’s strategic aspiration was to strengthen its footprint in high value gas export through liquefied natural gas (LNG).
Nigeria, he noted, would aim to secure about 10 per cent of global market share of traded LNG.
“On the expansion of our existing 22 metric tonnes per annum (MTPA) NLNG plant, we are at the verge of taking Final Investment Decision (FID) this year for additional 8MTPA NLNG Train 7 Plant.
“Furthermore, in terms of frontier exploration, we are optimistic that in the Benue trough, we will drill an appraisal well in Q3-2018 to test the extent of the Kolmani Structure in the Benue trough. Recall that Kolmani river-1 exploration well drilled by Shell in 1998 encountered 238 feet net hydrocarbon interval,” he stated.
Baru equally noted that getting the corporation’s four refineries to work optimally was still a priority to it. He said investors in the plan to revive the refineries will have about 24 months to get them working again at 90 per cent production levels.
On the current conditions of oil production in the country, he said: “Currently, relative peace has returned to the Niger Delta, critical export facilities have been repaired and our daily crude oil production has increased significantly although there are still minor pockets of sabotage incidences being experienced.”
Meanwhile, the Secretary General of the Organisation of Petroleum Exporting Countries (OPEC), Dr. Mohammed Barkindo, has said that high and low oil prices have negative impacts on producer and consumer countries of oil, and as such, the global oil market must continue to strive for a balance in oil prices.
Barkindo, who delivered a paper at the NOG, said that both developments affect consumers and producers differently, but that the market eventually ended up a loser.
“Extreme volatility in the oil market has very negative consequences for such consumers and producers. Low oil prices are bad for producers today and create situations that are bad for consumers tomorrow.
“And high oil prices are bad for consumers today and lead to situations that are bad for producers tomorrow. Volatility is a devastating disincentive for investment, which is the lifeblood of our industry and essential for ensuring adequate supply in the future,” Barkindo explained.