4 May 2018

Nigeria: NNPC Raises $12bn for Projects, Crude Forward Sales

Despite the non- passage of the contentious Petroleum Industry Bill, PIB, by the National Assembly, Nigeria appears to be attracting investors in the oil and gas industry as the Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Dr. Maikanti Baru, said the corporation had raised about $11.9 billion to finance projects and crude forward sales.

Speaking at the ongoing 50th Offshore Technology Conference, OTC, in Houston, Texas, Baru said there was renewed investors' confidence in the industry. This came as he assured that the petroleum industry bill will be passed in the third quarter of 2018.

He said: "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 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, NPDC crude oil. In the area of contractor financing, the Ajaokuta-Abuja-Kaduna-Kano, AKK projects have also been awarded. In total, we have raised $3.6 billionn (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. Just last week, Shell announced an investment inflow of $15 billion in gas and deep offshore developments. This is a clear demonstration of the confidence investors have on the sector."

Giving a hopeful perspective of Nigeria's oil industry, he said: "From a policy perspective, there are ongoing reforms in the industry in the mould of the Petroleum Industry Bill.The 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 wil 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 deliver on this very important national assignment," he said.

According to him, the upward swing in the price of crude oil signifies that good times are here again. "This year's event is also coming up at a time when we see an upward swing in crude oil prices to the 70s region. I recall that this time last year, we were in the 50s region. Possibly the good times are here again. We hope it stays," he added.

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