You are here
Home > LOCAL > What alternative funding has achieved — NNPC

What alternative funding has achieved — NNPC

Please follow and like us:

  • 0
  • Share

The Nigerian National Petroleum Corporation (NNPC) has stated that the alternative financing model adopted has led to the sustainable funding of deep-water Production Sharing Contract which currently accounts for 41 per cent of daily national production.

Group Managing Director of the Corporation, Dr. Maikanti Baru, disclosed this while speaking at the 42ndSociety of Petroleum Engineers (SPE) Nigerian Annual International Conference & Exhibition (NAICE) in Lagos.

Group Managing Director of the NNPC, Dr Maikanti Baru

The NNPC helmsman noted that resort to alternative financing mechanism for upstream operations has been on the rise over the years, with over 2000% production growth recorded within the last ten years.

In a paper entitled: “Revamping the Nigeria Oil & Gas Industry through Alternative Funding: Opportunities, Challenges, Innovations & Solutions”, Baru said alternative financing has deepened local banks’ participation in the upstream sub-sector of the industry.

Dr. Baru stated that NNPC’s adoption and execution of alternative financing models for funding its Joint Venture (JV) obligations so far have restored investors’ confidence and stimulated further Foreign Direct Investments (FDI) in the nation’s oil and gas industry.

The GMD said in order to meet government expenditure and strategic focus, the Corporation had to explore alternative financing, which he further described as “important to the sustenance of the industry.”

He charged participants at the conference to pay attention to the increasing global competition, which he identified as competition for new production centres across the globe (especially in Africa), shale oil in the US, Argentina and other places; and the competition in terms of crude oil quality.

“To turn the wheel of the industry and ensure that funding doesn’t limit our growth, it is important we consider both the traditional and non-traditional funding options,” Baru stated.

He observed that traditionally, Nigeria had raised funds utilising equity or self-funding from cash-flow, commercial debt instrument or partner funding in form of Carry or Modified Carry Arrangement (MCAs).

Facebook Comments

Please follow and like us:

  • 0
  • Share

Leave a Reply