The Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, yesterday restated that the corporation signed third party financing deals with international banks to the tune of $3 billion for the development of the oil and gas industry.
Baru, who stated this at the 42nd Nigeria Annual International conference and Exhibition of the Society of Petroleum Engineers (SPE) in Lagos, also said Nigeria needed to leverage on her vast mineral wealth in terms of the 37 billion barrels of oil reserves and 199 trillion cubic feet of gas reserves, among others, to prove up other sectors of the economy and to promote import substitution in such areas as agriculture, manufacturing, and general services. He explained that the country needed to be self-sufficient in at least the provision of basic needs and common services.
He said: "We have signed third party financing deals with the international banks and new oil and gas development worth $3 billion despite the degradation in 2016 and 2017. This demonstrates the phase in our industry and the potentials we can unlock.
"We also executed a nobel and micro-financing bill of over $700million from Schlumberger for the development of the 250 million barrels of oil equivalent per day from 165 million barrels of oil under the joint venture investment exploration and production," he said.
Baru also said under the short, medium term in-house, the NNPC intends to focus on raising first access base lending for NPDC, an upstream subsidiary. "For the owners, where it has JVs with the indigenous producers, the NNPC also has a goal to incorporate bonds and other long term maturing assurances to the funding means.
"For the IOCs partners, we would continue to leverage the strong credit rating of these partners, identifying key quickening projects that are easy to mature with strong cash flow projections and attracts necessary funding the debt market.
"These attracting financing approaches to fund NNPC JVs obligation have helped to renew investor's confidence and cement further foreign direct investment. In particular, this has opened local banks participation in the financing of the upstream as the financing are syndicated from local banks and international lenders.
"Permit me to once again appreciate the local banks and international lenders for presenting the service providers for their continued faith in Nigeria on their support in providing funding. It is quite an exciting time ahead in the Nigeria oil and gas industry. The industry is funding both development and infrastructure through alternative means. So far, the financing has centered on production would like to see in many ways on how to finance exploration.
"In today's fast-paced dynamic World, Nigeria needs to leverage on her vast mineral wealth in terms of the 37 billion barrels of oil reserves and 199 trillion Cubic feet of gas reserves, amongst others, to prove up other sectors of the economy and to promote import substitution in such areas as agriculture, manufacturing, and general services etc. We need to be self-sufficient in at least the provision of basic needs and common services.
"The above submission presupposes that in the boom times, the country needs to save and also invest in critical sectors that will cushion the effect of times of economic shocks. In other words, Nigeria's fiscal and monetary policies, which are indexed to crude oil prices and thus cyclical in nature, may be unfavourable to the growth of the Nigerian economy in the long term," he added.