Yemisi
The Nigerian National Petroleum Corporation (NNPC) has said that shortage of funds is crippling major projects in the oil and gas sector and to unlock the sectors potentials stakeholders should explore other ways to create alternative funding for exploration activities in Nigeria.
Speaking at the ongoing Nigeria Annual International Conference and Exhibition (NAICE) organised by Society for Petroleum Engineers (SPE) Nigeria Council in Lagos on Monday the Group Managing Director (GMD), NNPC, Dr. Mainkanti Baru, stated that the reform by the NNPC has centered on third party financing for Joint Venture (JV) operations, hence there is need to look for ways to design an alternative funding for exploration activities in Nigeria.
According to him “I extend NNPC gratitude to our local banks, international lenders and Schlumberger representing the local service providers, for their continue faith in Nigeria and their support in providing funding. It is quite an exciting time ahead in the Nigerian oil and gas industry. The industry is financing both the development and infrastructure through alternative funding means. The case in point is the Ajaokuta-Kaduna-Kano (AKK) pipeline that is contractor finance with about $3billion. NNPC appreciates the cooperation of its partners and government financiers to move the industry forward. Our goal remains value delivery for all.
“So far, the financing as centered on production, I will like to see the industry to concentrate and develop innovative ways on how to finance exploration. This I believe will be the big take-away from this workshop as it appears this is an area that is high and tough. Can we create an industry pool that will be funding for exploration? This is a worthy idea that we should look into. I hope that deliberations today will dwell on other areas that I might have left out today.”
However, he stressed that “we required an incremental annual capital funding of minimum of $7million to cover the gap and to ensure growth, it was also clear to us that we cannot leave funding gap without looking out giving the outlook of government expenditures and strategic focus.”