The Nigeria National Petroleum Corporation (NNPC) has said that it would devise measures to solicit funds for operators in the country’s oil and gas industry in order to ensure the country meets up with its three million barrels per day production.
Investment is Nigeria’s oil sector has been cut down owing to funding challenges experienced by the operators.
The Group Managing Director (GMD) of the corporation, Dr. Maikanti Baru believes if the effort by NNPC to seek funding options for the operators yield result, it would also help the country to achieve its target of raising reserves to 40 billion barrels in 2020.
Dr Maikanti Baru who was represented by the Chief Operating Officer (COO) of NNPC Ventures, Dr Victor Adeniran, spoke at the 36th Nigerian Association of Petroleum Explorationists (NAPE) in Lagos.
“Currently, as a physical incentive, all exploration cost within the industry is expended, this is a laudable and pro industry incentive from the government.
“The implications is that funding need to be incurred prior to taking benefits, hence the funding structure of exploration within the industry needs to be strengthened,” Baru said.
He noted that there were exploration prospects for new oil and gas reserves in the country which would open up new fields.
This, he said, would mean the industry required special fund to fully achieve its potential.
“We would open up new fields in terms of marginal fields development, dormant assets and new assets, as there are still condensing prospects for new oil and gas reserves in Nigeria, particularly in the ultra-deep water and inland frontier basins, and the timing and process must be transparent.”
According to him, if this is done on consistent basis, the nation’s reserve replacement ratio, newly discovered reserves versus productions in the next 10 years will be more than double.
He listed some of the channels through which the fund would come from to include, Nigerian Content Development Monitoring Board (NCDMB), Local Content Fund or from the Central Bank of Nigeria, Seismic exploration support fund for Seismic survey in under explored areas of the country.
He also suggested the creation of a revolving special fund for the country’s hydrocarbon exploration on contributory funding basis.
He then expressed the willingness of the NNPC to support such structures and in creating a workable framework.