The Nigerian National Petroleum Corporation (NNPC) has so far settled over $2 billion cash call arrears out of the $5 billion Nigeria owes joint venture (JV) partners since 2015, its Group Managing Director, Dr. Maikanti Baru, said yesterday in Abuja.
According to him, the oil corporation gave priority to settling the arrears to encourage players in the industry, particularly the traditional joint venture (JV) partners.
Baru, while officially declaring open the 2019 Nigeria Oil and Gas Conference and Exhibition (NOG) under the theme: ‘’Promoting Investment and Collaboration in Nigeria’s Oil and Gas Industry,’’ said efforts were geared towards sustaining investment in the oil industry and renewing investors’ confidence.
He added that the corporation has created a platform in the oil and gas sector to explore a vast range of investment opportunities, which span the value chain.
He listed the opportunities to include merger and acquisition, pseudo equity type transactions, provision of drilling rigs and related services, heavy equipment leasing, seismic acquisition and processing, reservoir engineering and field development studies as well as core engineering services.
Baru stated that through the years, the NOG had braced several odds to emerge as an important conference and exhibition in the calendar of the Nigerian oil and gas industry by providing an invaluable platform for the cross ventilation and fertilisation of innovative ideas across the value chain of business.
He stated: “To encourage the existing players in the industry particularly the traditional JV partners, NNPC undertook to settle all outstanding cash call arrears amounting to $5 billion in 2015. Till date, we have defrayed over $2 billion. All these efforts are geared towards sustaining investment and renewing investor confidence,” he stated.
He also said the corporation had in the last three years been active in the capital market, accessing financing for different projects, which have sustained the industry’s momentum.
“They have also been used as levers to promote collaboration over the past years, through systematic process which incrementally opened new areas to indigenous players.
“For some, it has provided the opportunity to collaborate with international or established industry players.
“It is indeed a great honour for me to be invited to deliver a keynote address and for this and many more reasons, I must thank the organisers, the CWC Group, for their steadfastness through the period and in doing this it is natural to pay tribute to the departed Dr. Rilwanu Lukman and Dr. Alirio Parra, founders of the CWC Group for their leadership and clairvoyance.
“On a personal note, this year’s edition comes with mixed feelings, albeit for some special reasons. Distinguished ladies and gentlemen, this outing marks my last NOG engagement as the group managing director of the NNPC.
‘’Like many of you know, I will be retiring officially from the corporation on 7th July, 2019, exactly five days from now, by then I would have attained the statutory 60-year retirement age.
“I am therefore super-excited today for the great opportunity afforded me by this year’s edition of the NOG for two reasons. The first reason is that it falls perfectly on my twilight days at the NNPC, which interestingly means I have that lifetime chance to say goodbye to many of you whom I have known and interacted with for close to three decades of my career at the corporation.
“Even more important is the second reason, which is to be privileged to share with you some of NNPC’s modest efforts – not only these past three eventful years, but throughout the course of my career – at promoting investment by stimulating collaboration among the various players within Nigeria’s Oil and Gas Industry (exactly the theme of this Conference).’’
According to Baru, Nigeria holds about 2.2 per cent of global oil reserves while the nation’s crude oil reserves have grown steadily from about 22 billion barrels in 1999 to 37.5 billion barrels in 2018.
Besides, Nigeria is also home to the second largest crude oil reserves in Africa after Libya.
He said: “Our crude oil production currently hovers around 2.2 -2.3 million bpd. This was bolstered by the coming on stream of the Egina Field in December 2018 and which has currently ramped up to 200,000bpd.
“We have the ninth largest gas reserves in the world with a proven gas reserves of 201trillion cubic feet (Tcf) and an upside potential of about 600Tcf. In terms of gas production and utilisation, Nigeria averages about 8.4 bscfd.
“While only 18 per cent of the production is consumed in the domestic market (Power, Industries and WAGP), 43 per cent is exported as LNG, 32 per cent is re-injected for enhanced oil recovery and other operational uses like fuel gas while seven per cent of total gas production is currently being flared.
“These resources or reserve numbers on their own mean nothing except we drive investment in a sustainable and collaborative manner. This has been the thrust and focal point of our drive over the past three years at NNPC and we appreciate the goodwill and support we have enjoyed from all.
“Standardisation, consolidation, improved engagement with government and investment in human capacity development- this is the engine room for innovation. We can create local solutions that have global applicability.
“The industry must collaborate to create solutions by channelling investment into research that would give room for use of locally sourced products and encourage import substitution.”
Baru also said this year’s NOG offered another opportunity for industry players and stakeholders to collaborate to find workable solutions to issues that confront challenges in the oil sector.
“For Nigeria therefore, oil and gas remain essential building blocks for our economic growth, particularly as a developing country. There is, therefore, no gain saying the fact from the upstream, midstream and downstream sub-sectors, the Nigerian Oil and Gas Industry is replete with massive investment opportunities,” he added.