Baru rolls out tenure financing deals, silent on revamping refineries
Fresh detail on why the Nigerian four refineries had remained in coma since the beginning of President Muhammadu Buhari administration since 2015 has emerged from the outgoing Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru.
In his keynote address at the official opening of the 2019 Nigeria Oil and Gas (NOG) conference in Abuja, Baru spoke for several minutes giving details of financing schemes at NNPC without making any mention of the state of the four refineries in Port Harcourt, Warri and Kaduna which had been running losses on a yearly basis.
He said the Corporation under his watch has reeled out over $8bn worth of deals currently being handled and pursued by the NNPC since the beginning of 2019, and between 2015 and 2017, the corporation was involved in various project financings of over $3bn in new investment capital.
According to him, “This year, we have significantly progressed new third- party financings for the NNPC/SPDC JV (Shell Petroleum Development Company Joint Venture) and NNPC/MPNU JV (Mobil Producing Nigeria Unlimited). Both transactions were substantially over-subscribed.
“NNPC/SPDC Santolina III Project has an estimated cost of circa $500m and NNPC/MPN Satellite Field Development II Project has an estimated cost of $1.3bn (NNPC to raise circa $700m in third-party financing).”
“Furthermore, we have initiated third-party financing for the NNPC/NAOC (Nigeria Agip Oil Company) Okpai II Independent Power Plant project, with estimated cost of circa $658.42m and the NNPC/TEPNG (Total Exploration and Production Nigeria) Ikike development project, with estimated cost of circa $473.4m to be funded through prepayment for gas by NLNG. The price balance is to flow to the Federation Account.”
Baru also mentioned the successful Memorandum of Understanding (framework agreement) between NNPC and the Nigeria Liquified Natural Gas (NLNG) company for the provision of about $2.5bn funding for NNPC’s portion of cash call payable on upstream gas supply projects for SPDC, TEPNG and NAOC JVs.
The NNPC within the priod under review, also initiated negotiations for the Financing and Technical Services Agreements for identified Nigeria Petroleum Development Company assets – OMLs 13, 65 and 111.
Baru added further that “As you may be aware, NPDC currently contributes about eight per cent of current national daily production. Further developments from these assets and NPDC JV assets are expected to move NPDC to over 300 barrels per day equity.
“We have progressed negotiations with EPC contractors and potential Chinese lenders on the third-party financing for the Ajaokuta-Kaduna-Kano Gas Pipeline Project of $2.89bn.”
Though he noted that NNPC had been active in the frontier basins as exploratory activities progressed from seismic data acquisition, processing and interpretation to the drilling of the Kolmani River-2 well in the Benue Trough and plans to resume exploration in Chad Basin, he was silent on the current total cost of the endless search for oil in the north.
