February 28, 2019

Over $48bn investment opportunities exist in Nigeria’s oil industry — NNPC


Group Managing Director of the NNPC, Dr Maikanti Baru

By Michael Eboh 

The Nigerian National Petroleum Corporation, NNPC, Thursday, disclosed that there are currently over $48 billion investment opportunities in the Nigerian petroleum industry, while it called on foreign investors to tap into these opportunities. 

President Muhammadu Buhari, Minister of Petroleum Resources, Ibe Kachikwu, Ministe of State, Petroleum Resources and Maikanti Baru, Group MD, NNPC

In a statement in Abuja, Group Managing Director of the NNPC, Mr. Maikanti Baru stressed that several new frontiers for exploration opportunities abound in Nigeria, noting that offshore discoveries in the country had mostly been limited to between 1,000 – 1,500 meters of water depth.

According to him,  the NNPC’s Frontier Exploration Service was currently drilling the Kolmani River-2 Well where desktop estimates revealed that about 400Bcf of gas is expected to be encountered.

“Beyond these water depths, the new frontiers of ultra-deep waters need to be tested. And that is where we need the investors,” Baru said.

He, however, stated that unless issues related to legal and regulatory uncertainties, lack of infrastructure, skilled manpower shortage, transparency, and accountability are addressed amongst key stakeholders, the continent’s Oil and Gas Industry may not achieve its full potentials.

According to the statement, Baru was speaking at a Panel Session on the topic “Insights on Future Exploration Hotspots: Opportunities for Africa’s Oil & Gas Industry” under the sub-theme “The New Frontier for Africa’s Oil & Gas” at the 2019 International Petroleum Week conference in London.

ALSO READ: NNPC extends $6bn oil swap contracts by 6 months

Reeling out the numerous potentials of Africa’s Oil and Gas Industry, Baru said the continent’s energy outlook was looking positive amid difficult operating and economic headwinds.

He explained that over 41 billion barrels of oil and 319 trillion cubic feet of gas were yet to be discovered in sub-Saharan Africa alone, while between 2008 and 2017, exploratory success in the sub-region was at least 45%.

According to him, there has been a surge in the capital expenditure (CAPEX) across Africa’s Oil and gas sector, with close to $194 billion earmarked to be spent between 2018 and 2025 on 93 upcoming oil and gas fields in Africa.

“Out of this $194billion, Nigeria accounts for $48.04 billion (over 24.8%) of the total CAPEX coming into upcoming projects in Africa over 2018 to 2025, with over 20 planned projects,” Baru stated.

He observed that 23.8 percent of the CAPEX in Africa would be spent in Mozambique, 11.3 percent in Angola while about 29.2 percent would be spent in Tanzania, Senegal, Mauritania, Uganda, Egypt, Algeria, and Kenya combined.

Baru noted that with more than 14 oil-producing countries, Africa currently accounts for 7.5 percent, about 126.5Billion barrels of crude oil, and 7.1 percent, about 488 trillion cubic feet, TCF, of gas, of global proven oil and gas reserves respectively.

He maintained that in terms of production, the continent accounted for 8.7 per cent, about 8.1Million barrels per day of global oil production and 6.1 per cent, about 21.8bscfd,  of global gas production, even as it consumed four million barrels of oil per day and 13.7bscfd of gas, equivalent to 4.1 percent and 3.9 percent of global oil and consumption respectively.