The Nigerian National Petroleum Corporation on Monday called on stakeholders in the oil and gas industry to look for ways of creating alternative funding for exploration activities in Nigeria.
Dr Maikanti Baru, Group Managing Director of NNPC, made the call at the ongoing Nigeria Annual International Conference and Exhibition of the Society for Petroleum Engineers of Nigeria in Lagos.
Baru said that the reform by NNPC centered on third party financing for Joint Venture operations, hence the need to look for ways to design an alternative funding for exploration activities in Nigeria.
He said: “So far, the financing has centred 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.”
He expressed the NNPC’s gratitude to Nigerian banks, international lenders and Schlumberger, representing the local service providers, for their continued faith in Nigeria and their support in providing funding.
Baru said: “It is quite an exciting time ahead in the Nigerian oil and gas industry.
“Alternative financing approach had yielded positive results and helped to renew investors’ confidence resulting in a boost in Foreign Direct Investments in Nigeria.”
The NNPC boss said the financing arrangement had also deepened the participation of local banks in funding the Upstream Sector as the funds were syndicated from both local and international banks as well as lenders.
He commended the local and international lenders and the Joint Venture partners for their continued faith in Nigeria and their support towards providing the funding.
He said: “The industry is financing both the development and infrastructure through alternative funding means. The case in point is the Ajaokuta-Kaduna-Kano pipeline that is contractor finance with about three billion dollars.
“NNPC appreciates the cooperation of its partners and government financiers to move the industry forward. Our goal remains value delivery for all.
“We require an incremental annual capital funding of minimum of seven million dollars 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.”