There is increasing global competition on Nigerian crude oil due to the rise of new production centers across the globe particularly in Africa, and Argentina, Dr. Maikanti Baru, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), has said.
Baru said the development portends a new dimension for the Nigerian oil and gas industry.
He said Nigeria needs to unlock new barrels as quickly as possible to stay relevant in the new emerging world, adding that without adequate funding, the country cannot meet the targets.
He also said evolving new funding mechanisms for the Joint Venture operations was part of the focus of the reforms undertaken by government to eliminate the often difficult cash call regime, enhance efficiency of the management of oil and gas resources and guarantee growth.
‘’To encourage the existing players in the Industry, particularly our traditional JV partners, we undertook to settle all outstanding cash call arrears amounting to a negotiated sum of a little over $5billion.
“This has restored confidence in the Nigeria oil and gas Industry. We have signed third party financing deals with several international and local banks on new oil and gas developments worth over $3billion despite the depression in 2016/2017. This demonstrates the faith in our Industry and the potentials we can unlock. For our IOC partners, we would continue to leverage the strong credit rating of partners, identify key quick-win projects that are easy to mature with strong cash flow projections and attract the necessary funding from the capital market,’’ he added.
According to him, these alternative financing approaches to fund NNPC’s JV obligations have helped to renew investors’ confidence and stimulate further Foreign Direct Investments, adding that the arrangement has deepened local banks participation in financing the upstream sector as the financing are syndicated from local banks and International lenders. .
‘’The industry is funding both development and infrastructure through alternative means. NNPC appreciates the cooperation of its Partners, Government and Financiers towards moving the Industry forward. Our goal remains value delivery for all.
“Based on the International Energy Agency definition of energy security as the uninterrupted availability of energy sources at an affordable price” and the International Institute for Sustainable Development definition of sustainable development as development that meets the needs of the present without compromising the ability of future generations to meet their own needs; the key words to consider within these two (2) definitions are: availability, affordability, meeting the needs of the present and future generations.’’
SOURCE: independent.ng