…as NNPC takes financiers’ hunt to UK, U.S.
The Federal Government has advanced hunt for financiers of its $ 5.5 billion crude oil forward sales, New Telegraph has learnt. Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, confirmed this on the side-line of the just concluded Offshore Technology Conference (OTC) in Houston, Texas.
The deals are for government to get funds from buyers ahead of delivery of crude oil in a bid to fund selected oil and gas projects. While the investors’ hunt has helped in securing $3.6 billion for projects such as Chetah, Santolina, Falcon and the Schlumberger/First E&P FSA, government plans to get $5.5 billion from crude forward sales and $2.8 billion for Alaoji Kaduna Kano (AKK) projects.
Baru told this newspaper that his Corporation is convinced that the expectation on the funding deals would be surpassed. He disclosed that NNPC met with prospective investors in London while some of them were in several meetings with NNPC at the OTC.
“The crude being negotiated for the forward sale financing are the ones for federation and Nigerian Petroleum Development Company (NPDC),” he said. “We are also closing some financing deals on forward sales of Federation and NPDC crude oil. We have already signed four financing deals on upstream development in support of our cash call exit.
“We are also closing some financing deals on forward sales of Federation and NPDC crude oil. In the area of contractor financing, the AKK projects has also been awarded.”
Just last week, Shell, according to Baru, “announced an investment inflow of $15 billion in gas and deep offshore developments. This is a clear demonstration of the confidence investors have in the sector.”
Expressing optimism over stability in prices of crude oil, the NNPC boss maintained that the Corporation had intensified exploration activities in the country’s frontier basins (Chad, Anambra, Bida, Dahomey, Gongola/Yola and the Sokoto basins, as well as the Upper/Lower Benue Trough), especially the Chad basin, to prove more reserves. “We expect to commence drilling in the Benue Trough anytime soon with the appraisal of the Kolmani -1 River discovery well,” he said.
“The outcome of these activities I have mentioned are more opportunities for goods and service delivery by both the local and international companies operating in Nigeria.
“From a policy perspective, there are on-going reforms in the industry in the mould of the Petroleum Industry Bill (PIB). PIB, as it is today, has been split into four parts by the National Assembly as follows – the Petroleum Industry Governance Bill (PIGB), the Host Communities, Fiscal Reforms and the Administration Bill. Whilst the Governance Bill has been passed, the other three are at different levels of review.
“Nonetheless, we have assurances from our National Assembly that by early Q3, 2018 there would be light at the end of the tunnel. Its passage is so important to help unlock billions of dollars of investments, which has been held up due to the uncertainty of its passage. Permit me to use this opportunity to commend our legislature for their commitment to deliver on this very important national assignment.
“Despite the delay in the passage of the bill, there is a renewed confidence in investing in the Nigerian Oil and Gas industry. Each time we go out to raise finance, the appetite is quite good. We have already signed four financing deals on upstream development in support of our cash call exit. We are also closing some financing deals on forward sales of Federation and NPDC crude oil” This, he explained, is a clear demonstration of the confidence investors have on the sector. “As I mentioned earlier, we signed the contracts to kick off the 614Km Ajaokuta-Abuja- Kaduna-Kano (AKK) pipeline project.
The AKK pipeline at completion will deliver gas to the on-going Abuja, Kaduna and Kano Power Plants and also revive the manufacturing industries in the Northern part of the nation,” he said. “In terms of refining and production of local petroleum products, we have faced the challenge head-on and we are fully committed to the Ministerial directive of ending the importation of petroleum products before the end of 2019.
We are in talks with the original builders of the refineries to return them to at least 90 per cent capacity utilisation before the 2019 deadline. The expectation is for Nigeria to transform from being a net exporter of crude oil to being a net exporter of petroleum products. ‘To this end, we proceeded with tendering of the rehabilitation programmes of our four refineries using a contractorfinancing model.
The process is almost complete and successful companies for the different projects will soon be announced. This model is expected to be a self-sustaining financial model with near zero reliance on the Federal Government funds. For smooth running and implementation, we are also changing the operating and commercial framework of the refineries to make them work efficiently and also be commercially viable.”
NNPC and the Ministry of Petroleum Resources are also, according to Baru, collaborating to encourage the establishment of modular refineries in the Niger Delta area to encourage job creation.
“Thus far, about 35 interests for modular refineries have been declared and the Department of Petroleum Resources (DPR) has issued licenses to 13 of them. “In parallel, the Ministry of Petroleum Resources has also launched the process of flare out commercialization programme, which will see the licensing of flare point to potential investors.”
Metro and Crime9 hours ago
We give ‘Area Mama’ N5,000 after every robbery operation –Suspect
Metro and Crime21 hours ago
Man wants 20-year-old marriage dissolved over wife’s alleged tantrum
National news22 hours ago
IBB, Kalu in closed door meeting
News17 hours ago
Fayose to Magu: You have personal hatred against me
News Around Nigeria21 hours ago
Ortom to Gemade: I do not betray people
Metro and Crime10 hours ago
Ex-convict steals car days after release from prison
Politics19 hours ago
Osun Poll: Charlyboy’s “Ourmumundondu” group visits Ooni of Ife
Metro and Crime22 hours ago
160 communities in Niger submerged by flood – NSEMA