A Review of the Nigerian Energy Industry

Baru: NNPC raises $11.9bn for oil and gas sector investments

*Dr. Maikanti Baru.

OpeOluwani Akintayo

09 May 2018, Sweetcrude, Lagos – The Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Dr. Maikanti Baru, has revealed that the corporation has recently raised $11.9 billion for investments in the Nigerian oil and gas sector.

He disclosed this at the just-concluded Offshore Technology Conference in Houston, Texas, saying the funds are for exploration and production as well as pipeline projects.

“Each time we go out to raise finance, the appetite is quite good. We had 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 the country’s and Nigerian Petroleum Development Company’s (NPDC) crude oil,” Baru said.

The NNPC boss also revealed that the corporation was undertaking some major projects through contractor financing, citing the Ajaokuta-Abuja-Kaduna-Kano, AKK, gas pipeline project as an example.

Giving further insight on the $11.9 billion raised by the NNPC, Baru said: “In total, we have raised $3.6 billion (for projects Chetah, Santolina, Falcon and the Schlumberger/First E&P FSA), we are raising $5.5 billion from crude forward sales and $2.8 billion for AKK projects”.

He expressed delight at last week’s announcement by the Royal Dutch Shell of an investment plan totalling $15 billion in Nigeria’s oil and gas, saying the development “is a clear demonstration of the confidence investors have in the sector.”

The NNPC group managing director, who also spoke on the Petroleum Industry Bill, PIB, still in the National Assembly, expressed optimism that it would be fully passed by the third quarter of this year.

The PIB, which originally was conceived as whole, has been split into four parts: the Petroleum Industry Governance Bill, PIGB; the Host Communities, Fiscal Reforms and the Administration Bills. The PIGB has been passed by the National Assembly earlier this year while the other three are at different levels of review at the Senate and the House of Representatives.

“From a policy perspective, there are ongoing reforms in the industry in the mold of the Petroleum Industry Bill”.

“We have assurances from our National Assembly that by early Q3, 2018 there will be light at the end of the tunnel. Its passage is important to help unlock billions of dollars of investments, which have been held up due to the uncertainty of its passage. Permit me to use this opportunity to commend our legislature for their commitment to delivering on this very important national assignment,” he said.

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