Spain — Federal government has said that the Nigerian National Petroleum Corporation (NNPC) has been granted administrative and financial autonomy to shop for $60 billion or N7.02 trillion.

NNPC requires the facility to fund its equity interests in upstream petroleum joint-venture operations in the next five years.

This development coincides with moves by the corporation to take over proprietorship of oil fields hitherto in the concessions granted Shell Petroleum Development Company (SPDC) Nigeria Limited.

But the Managing Director of Oceanic Bank Plc, Mrs. Cecilia Ibru, assured that Nigerian banks would live up to the task of syndicating the huge credit facilities required to provide funding for oil and gas projects in the country.

The declarations followed the call on global investors to disregard the role of sensational foreign media on the situation in the Niger Delta and plug into the reforms in the Nigerian economy to sink substantial investment in the country's petroleum sector.

Minister of State for Petroleum, Mr. Odein Ajumogobia, whose paper was delivered at the ongoing World Petroleum Congress (WPC) in Madrid said resolution of the Niger Delta crisis and massive investment in the Nigerian petroleum industry would significantly address the global supply concerns that push up oil prices.

The minister who was represented at the Nigerian ministerial session at the event by the Minister of National Planning, Senator Mohammed Sanusi Daggash, told international investors that despite obvious challenges, the nation was on course to meet the policy aspirations to grow oil reserves to 40 billion barrels and producibility to 4.0 million barrels per day by 2010.

This, he said, would require investment of some $150 billion by NNPC and her joint-venture partners and contractors in the next five years, adding that the equity-funding responsibility on the corporation would amount to $60 billion.

He however assured that the ongoing industry reform goal was to empower the corporation to shop for the money from the money market and independent of government's annual fiscal budgets the implementation of which had delayed release of funds and impacted project delivery by operators.

He said more private investment were needed to fully realize the full potentials of the Nigerian oil industry and assure foreign investors that adequate measures were built into the reform processes to make the operating environment most congenial.

He explained that the overriding objective of the policy was to maximise the net economic benefit to nation from the country's vast oil and gas resources, and to enhance the social and economic development of the people while meeting the nation's need for fuel and competitive cost, and accomplishing all in an environmentally acceptable manner.

The policy, he said, would be achieved by ensuring fiscal, friendly business environment, supporting appropriate funding arrangement for growth and expansion programmes and driving active, local-content participation.

Key areas with in-depth reforms in the legislation, he said, include managing the industry for the country, repositioning various institutions, addressing specific upstream issues, downstream matters, fiscal provision, and to ensure balance of benefits to the nation and her partners.

In his own presentation at the event, Governor Timi Silva of Bayelsa State said that the situation Niger Delta is a not as terrible as it is being portrayed in the international media, explaining that most of the mails continuously pushed to the foreign media by militants were fake and cooked to attract global attention.

He however admitted that the Niger Delta crisis deserved international attention and mediation in order to unlock over one million barrels of crude oil production per day currently shut in the region due to security tension.

He urged the international community to intervene in the Niger Delta crisis, maintaining that the return of peace in the region would help in solving the current energy crisis worldwide.

In response to an observation by the Managing Director of AMNI International Petroleum, Mr. Tunde Afolabi, that the Nigerian capital market with estimated funding capacity limit of $85 billion would not be strong enough to support the reform provision for external funding of government's equity interests in the petroleum industry, Mrs. Ibru countered that the banks were on ground to take the challenge.

She said the Nigerian banks had mustered enough capacity and global credibility to broker funding for any kind of project in the Nigerian oil and gas industry, explaining that the consolidation exercise in the sector had made the local banks even more competitive.

She said the capacity of the banks to intermediate in project funding was rising rapidly, assuring the participation of Oceanic Bank in the oil industry project financing in line with the reform objectives of the government.

NNPC's take over bid of Shell's concession comes as government indicated displeasure with Shell Nigeria Exploration and Production Company [SNEPCO] over the security lapses that led to the recent attacks on the nation's Bonga oilfield by local militants that operated with frail logistics.

Both SPDC and SNEPCO are local subsidiaries of Royal Dutch Plc in Nigeria which until recently jointly produced over half of the nation's daily crude oil output of 2.5 million barrels per day.

The corporation also holds fears of operation disruptions at the recently re-streamed Kaduna Refinery following frequent attacks on the crude oil conduit by local militants that have crippled the 110-barrel per day processing plant.

Group Executive Director (Exploration and Production), Mr. Chris Ogiemwonyi, and the Group Executive Director (Refining and Petrochemical), Mr. Onochie Anyaoku, told Daily Champion separately at the ongoing WPC in Spain that both developments were consequent upon the Niger Delta hostilities against industry operations.

Mr. Ogiemwonyi said the Nigerian Petroleum Development Company (NPDC) had the capacity to operate the concessions if government would consider transferring the recovered blocks to the national oil company.

He said the concessions had lain idle for too long and it was time they were restored on stream to help rebuild the country's output capacity to its normal levels and also challenge the NPDC to become globally competitive in the upstream petroleum industry.

He said NNPC had already conveyed its preparedness to take over the blocks if they were up for grabs and transfer same to NPDC, its upstream exploration and production subsidiary.

He said NNPC was supporting the NPDC to ramp up its production from current 100 barrels per day to a double if all its plans to stream some field development projects materialized. The company expects to achieve substantial production growth with its new Oredo and Abari field from where over 30,000 barrels of oil per day was expected while the Ogoni fields, if released to the NNPC would help the NPDC double its current output.

Although he did not give the output potentials held by the Ogoni fields, Mr. Ogiemwonyi said that the fields would help ramp up output by the NPDC and position the country for effective upstream production activities in the country in line with the local-content policy aspirations of the government.

Government had recovered the Ogoni concessions previously held by SPDC pointing at inactivity on the fields for nearly 15 years in which the company had failed to reconcile with it host-communities in the area, but the company had since made it clear that it would retain its equity interests in the oil fields despite whoever might operate it.

On Bonga, he said Shell's SNEPCO failed to maintain the required minimum security level at the massive multi-billion dollar production vessels, allowing a few militants in speed boats have a field day during the attack. All other companies in the nation's offshore oil operations, he added, had maintained minimal security deterrents to militant attacks except at the Bonga which, he said was unguarded at the time of the attack.

He said a few navy gunboats would have made it impossible for the assailants to reach Bonga on speed boats, insisting that the company displayed serious security unconsciousness that made the production vessel vulnerable to attacks.

Daily Champion gathered that at a meeting summoned by the National Assembly committee on petroleum to get first-hand information on the Bonga attack, the Managing Director of SNEPCO was absent and the company's African boss, Mrs. Ann Pickard, who attended the meeting, could not offer satisfactory explanation on the security lapses that made the FPSO Bonga vulnerable.

On the Kaduna Refinery, Mr. Anyaoku said the sustainability of the plant's operations would depend on the integrity of the crude feedstock conduit which, he said, had remained vulnerable to sabotage by militants between Warri and Benin City.

He explained that the frequent bursting of the pipelines by local militants had been responsible for the frequent shut down of the refinery which, he said, had been rehabilitated enough to be on full stream.

He however expressed optimism that recent efforts to repair the trunk lines and reconnect them to multiple sources of crude would be sustainable in the light of government's commitment to permanent resolution of all issues that gave rise to restiveness in the Niger Delta.