Nigerian National Petroleum Corporation NNPC, in collaboration with one of its Joint Venture partner ExxonMobil is making moves to lift Nigeria’s crude oil production. NNPC said it has held talks with its upstream Joint Venture (JV) partner, ExxonMobil on the need for the JV to improve drilling activities and also refurbish key crude oil pipelines. The NNPC, in a statement in Abuja, said official of the corporation, led by its Group Managing Director, Mr. Maikanti Baru, met with a high-powered ExxonMobil delegation led by its Senior Vice-President, Mr. Jack Williams.
Baru said that with the talks, the joint venture with ExxonMobil, which until recently was the highest producer of crude oil in the country, was primed to make a rebound. He explained that the NNPC and ExxonMobil are seeking new measures to expand existing operational portfolio with a view to increasing crude oil production and availability of gas for power generation.
According to him, the NNPC had advanced talks with ExxonMobil on major operational issues like improved drilling to increase production and refurbishment of crude oil pipelines as well as supply of gas to the planned Qua Iboe Independent Power Plant among others. He said, “More importantly we also discussed their recommitment to supply gas to the domestic market and this is something that is very positive and they are willing. “We would quickly roll-out the programme to ensure that sufficient gas comes in for the IPP. We also secured a commitment from them to end gas flare at Qua Iboe Terminal (QIT) and other production areas.”
In his own remark, Williams described the meeting as very fruitful, adding that ExxonMobil was committed to growing its production in Nigeria safely and with much integrity. To underscore its aspiration for growth in production, Williams hinted that ExxonMobil was set to increase its JV budget for 2018 operations. The NNPC had last month stated that it had secured $3.8 billion foreign direct investment, FDI, inflow into Nigeria for four major oil and gas projects. The four major investments, it said were capable of providing incremental revenue to the national treasury by over $30 billion within the next 10 years.
The NNPC identified the Joint Venture alternative financing upstream investments to include: The $1.2 billion multi-year drilling for 36 offshore/onshore oil wells under the NNPC/Chevron Nigeria Limited JV, codenamed project Cheetah and the NNPC/First E&P JV and Schlumberger tripartite $800 million alternative funding agreement for the development of the Anyalu and Madu fields in the Niger Delta. Others, it said are the recent agreements executed in London last week for the $1 billon NNPC/SPDC JV Project Santolina and the NNPC/Chevron $780 million Project Falcon on Sonam, hitherto financed through JV Cash Call.
It said, “These four projects alone are going to raise incremental revenues to Nigeria of over $30 billion over the life of the projects in less than 10 years. They will also serve as part of the vehicle for exiting JV Cash Calls. “We have to pay our arrears of about $6 billion that were incurred pre-2016 and we are also paying up a tranche of about $1 billion 2016 arrears. We started in April 2017 with the payment of $400 million and we will pay the balance before the anniversary of the first payment.”
