Total Upstream Nigeria Limited Nigeria sets a new record in Nigeria’s petroleum industry with the Egina project, especially with the construction of the Floating, Production, Storage and Offloading, FPSO, which saw a significant number of the vessel’s topsides fabricated in Nigeria. In this interview with MICHAEL EBOH, Managing Director of the company, Mr. Nicolas Terraz, spoke on many issues, including Total’s new projects in Nigeria.
As the only International Oil Company (IOC) still in the downstream sector, how are you managing the business?
Our venture into downstream is not by chance. I believe our mission is not only to produce energy, but also to supply energy to people. Our presence in Nigeria is part of this vision and we say actually, we want to supply clean, reliable and affordable energy. Downstream, we are continuing to develop our downstream activities. Today, we have approximately 550 service stations in each of the states of Nigeria and we are continuing to develop the network.
Again, we are looking at the long term. In fact, we have been in the downstream business far longer than the upstream business, because the upstream business started about 55 years ago, more or less, but the downstream business started 65 year ago; in the 1950s. We have been through a lot of cycles; we have continued to take long term view, expanding our network, expanding our activities. Today, it is a bit challenging for the downstream, but we believe it would get better.
How far have you been able to settle your Joint Venture issues with the Federal Government?
The Joint venture programme is close to 100 per cent in terms of agreement and in terms of implementing what had been agreed. You remembered that we concluded agreement with the government and NNPC, December 2016. Afterwards, the agreement was made effective 2017. 2017 was the first year, for a very long time that we finished with zero NNPC cash call arrears. NNPC paid fully their share of the cost, which is because they got the share of their revenue fully as well.
For us, this was a demonstration that the agreement was working. Part of the agreement was for the JV partner to generate incremental production and based on the revenue from this incremental additional production, to reimburse the past arrears of the past programme.
This we have started to do for our own JV for instance, incremental production. Today, we are close to 10,000 barrels per day, which is good because it is not only good for reimbursement of past arrears but it also brings additional revenue to the government; additional royalties among others. It is working well. It worked well in 2017; it has been working well so far in 2018. It is an agreement where all the back arrears are gone. It is in the interest of all the partners, the Federal Government, the NNPC, the JV partners to make the agreement work.
After Egina, what next should we expect from Total?
Everybody is asking me this same question. What I tell them is that first; we are not finished with Egina. We still have lots of work to do in Lagos. We have some modules lifting, some integration, then we have to bring the FPSO to the field, do the connection, start up; all these before the end of year. I can tell you, 2018 for us is a very busy year. My first objective today is to deliver first oil from Egina by the end of 2018.
Now, we are also, of course, working on future projects. We are also studying what future projects would be, particularly, on the side of the joint venture with the NNPC. Today, we are working to generate incremental production. We have two drilling rigs working at the moment.
We are preparing the next project, which is Ikike. It is not as big as Egina, but it would bring 32,000 barrels per day production, plus quite a lot of gas, 3.5 million cubic metre per day of gas. In this project now, we are working with the NNPC and with the Nigerian Content Development Monitoring Board, NCDMB, to be able to take Final Investment Decision, FID, before the end of the year.
How have you been able to bring all your subsidiaries, especially solar to work in sync with the vision of Total?
In Nigeria, like in other country, we like to diversify our activities because we believe the energy mix is the real mix and you know oil and gas is important. Solar has a role in the energy mix, which is the clean energy of the future. What we are doing in Nigeria is developing solar activities which are in different sizes. The first is the micro size which is the solar lamps. The solar lamps are affordable and reliable.