NEWS - AFRICA
Nigeria to Earn $6.35bn in Taxes, Royalties
A
s NNPC Concludes $875.75m Alternative Financing Package for
OML 65 Expansion
The push by the Management of the Nigerian National Petroleum
Corporation (NNPC) to increase crude oil production and grow
the nation’s revenue profile gained momentum with the closure of
$875.75m alternative financing deal for the Nigerian Petroleum
Development Company (NPDC) operated OML 65 through the
Funding and Technical Services Agreement with CMES-OMS
Petroleum Development Company (CPDC).
A release by NNPC Group General Manager, Group Public Affairs
Division, Mr. Ndu Ughamadu, stated that NNPC Chief Financial
Officer, Mr. Umar Ajiya, disclosed that the project, which scope cuts
across exploration, development, production and provision of facilities
with incremental first oil targeted for Q4 2020, was estimated to have
potential reserves of 800 million barrels of oil equivalent (mmboe)
with an ultimate recoverable reserve of 244 mmboe and cumulative
production of 44mmboe from the Abura Main and Abura SE fields. NNPC to Publish Details of Petroleum Products
Supplies
Mr. Ajiya explained that over the project’s life, it was expected to
generate over $6.35bn in taxes and royalties to the Federation to support
Government’s medium to long term economic development agenda I
Speaking at the closing meeting with the financing partners in Dubai,
United Arab Emirates, Mr. Ajiya, described the contractor financing
model as an innovative approach by NPDC to funding its operations in
response to the challenging economic environment, saying the approach
would fast-track the development of NPDCs under-developed assets.
He informed that the project was expected to ramp up production at
OML 65 from 900barrels per day to 60, 000 barrels per day with average
production over field life at 40,000 barrels per day.
Throwing more light on the financing strategy, the CFO explained that
the package entailed comprehensive financing solution that addresses
the complex issues involved in growing NPDC’s production, minimizes
its cost of capital, and maximizes its value preservation, adding that it
also strikes a balance between risk and reward which gives investors a
rate of return that is commensurate with funding a brownfield project
which has significant exploration risk.
He said the expectation was that this collaboration between NPDC
and CPDC would translate in real terms to the efficient execution of
the scope of activities for the optimal development of the OML 65
Asset within cost and schedule, whilst maximizing value to all the
stakeholders.
He said it was projected that the collaboration would enhance
operational and financial performance strictly guided by the pre-
agreed Key Performance Indicators (KPIs) which remains critical for
determining incentive payment due to CPDC.
NPDC’s right to provide technical services, the CFO listed the field of
consideration in this regard to include: drilling and completion services;
building capacity and technology transfer; generating employment
opportunities for youths with attendant positive multiplier effect on the
nation’s economy, among other considerations. •
n line with the Mallam Mele Kyari-led management’s drive to conduct
the business of the Nigerian National Petroleum Corporation
(NNPC) in a transparent manner, the corporation is set to commence
the publication of details of its petroleum products supplies.
As release by NNPC Acting Group General Manager, Group Public
Affairs Division, Mr. Samson Makoji, said the corporation’s Group
Managing Director, Mallam Mele Kyari, disclosed this Tuesday while
receiving a delegation of the Media Initiative for Transparency in
Extractive Industries (MITEI) at the NNPC Towers in Abuja.
Addressing the MITEI delegation led by its National Coordinator, Mr.
Bassey Udo, the GMD stated that beyond publishing the corporation’s
Monthly Financial and Operations Reports, arrangements were afoot to
make public all petroleum products supply transactions in the country
to further deepen the culture of transparency in the system.
“We will continue to be transparent to our stakeholders, we will do
more than you can ever imagine in terms of transparency. We will not
just publish our financial records, but very soon, we will publish more
things that Nigerians need to know, particularly details of petroleum
products supply and distribution which is an area most people don’t
understand”, Mallam Kyari assured.
He said the corporation stood to gain more in terms of reputation and
goodwill from being transparent, noting that trust in business requires
corresponding responsibility of accountability to all stakeholders.
“You lose nothing by being accountable and transparent, and the
combination of the two will enable you have a good relationship with
your stakeholders and ultimately lead you to excellent performance”, he
said.
Mallam Kyari explained that his relationship with MITEI was based on
the principle of “common good” since the objective of the group aligns
with the core values of the corporation.
Earlier in his remarks, the National Coordinator of the group, Mr.
Bassey Udo, commended the Transparency, Accountability and
Performance Excellence (TAPE) initiative of the GMD as a visionary
move to reposition the oil and gas sector.
He expressed delight that the NNPC boss, within the short period of
his appointment, had started walking the talk by taking bold decisions
towards realizing his promises to the nation and citizens.
Udo said the group’s visit was informed by the consistent and
remarkable track record the GMD has maintained since his days as the
Group General Manager, Crude Oil Marketing Division (COMD).
He listed some of the actions of the current NNPC leadership that
endeared the corporation to the group to include: Publishing of the
DSDP contract winners, refineries rehabilitation efforts, signing of Key
Performance Indicators by top management, and the Transparency,
Accountability and Performance Excellence (TAPE) initiative. •