NNPC Targets 40bn Oil Reserves By 2020
The group managing director of the Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru, has disclosed that the country has set a target of increasing its crude oil reserves from the current 37 billion barrels to 40 billion barrels by 2020. To achieve this, the country, he said, had set a target of increasing crude oil reserves by one billion barrels year-on-year. Similarly, the national daily crude oil production is expected to raise from the current 1.86 million barrels per day to three million barrels per day within the same time period, according to Baru’s projections. Baru disclosed this while delivering a keynote address at the ongoing Nigeria Oil and Gas Conference 2018 entitled “Driving Nigeria’s Oil & Gas Industry towards Sustained Economic Development and Growth” in Abuja yesterday. Speaking on the role of its subsidiary, the Nigerian Petroleum Development Company (NPDC), in actualising this target, Baru said, “Internally, for NNPC’s upstream subsidiary – the NPDC, the plan is to grow its production to 500,000bpd of oil and 1.5Bscfd of gas by 2020.” The NNPC GMD noted that the government was not unaware of the need for clear policies, strong regulatory framework and institutions, fiscal stability and adherence to high governance codes as tools that will attract the capital and investment required to meet the set targets. According to him, “To spur much needed investment, government has issued an updated oil and gas policy, initiated the process for enacting a new Petroleum Industry Governance Bill that provides clarity on the Government institutions and their roles in the Industry. “We plan to be in the capital market to raise more finance for new oil and gas projects such as the NNPC/NAOC JV Idu-Redevelopment, South Gas Project, North Gas Project and Central Gas Project. NNPC/TEPNG JV’s Ikike Project, NNPC/SPDC JV Southern Swamp and Associated Gas Solution Step 2 Project, amongst a host of other new projects. “We intend to sanction the Multibillion US Dollars Bonga South West/Aparo (BSWA) project as soon as we conclude an agreement on the Heads of Terms with SNEPCO on the various pending PSC arbitration disputes. This will jump- start the resolution of all the other PSC Arbitration Disputes,” Baru said. On gas production, the NNPC GMD stated that the domestic demand for gas in Nigeria was unprecedented, with a current daily realistic gas demand of 4,000mmscfd which is expected to grow exponentially to about 7,500mmscfd in the next five years. According to him, the Corporation within the next three years, along with her Joint Venture partners, are committed to increasing natural gas availability from the current 1.5bscf/d to about five billion standard cubic feet per day in 2020. “Consequently, the government will supply enough gas to generate up to 15GW of electricity to the power sector by 2020 and stimulate gas-based industrialization. “We would continue to progress with our Seven (7) Critical Gas Development Projects (7CGDP) which has also been established to deliver about 3.5bscfd of gas to the domestic market by 2020 which is expected to support power aspirations and boost the economy,” he said. According to him, the NNPC remains focused on the continued implementation of the gas master plan despite the infrastructural challenges facing the sub-sector. He explained that gas pricing has been adjusted to export parity, stressing that legacy debt owed by the various sectors to gas suppliers are being paid through an intervention fund arranged by the Central Bank of Nigeria (CBN). He added that gas supply agreements would continue to be made effective with terms that assure bankability to provide the relevant comfort to the producers. He also gave assurance that the World Bank Partial Risk Guarantee (PRG) would be sustained to provide securitisation of gas revenues, saying these interventions are boosting confidence in the gas sector. Speaking on the gas export market, Baru said, “Part of our strategic aspiration for gas is to strengthen our footprint in high value gas export through LNG and aim to secure about 10 per cent of global market share of traded LNG. On the expansion of our existing 22MTPA NLNG plant, we are at the verge of taking Final Investment Decision (FID) this year for additional 8MTPA NLNG Train 7 Plant.” “In terms of frontier exploration, we are optimistic that in the Benue trough, we will drill an appraisal well in Q3 2018 to test the extent of the Kolmani Structure in the Benue Trough. Recall that Kolmani river-1 exploration well drilled by Shell in 1998 encountered 238ft net hydrocarbon interval,” he stated.