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Energy

NNPC expects $8.7 billion investments from refineries, pipeline rehabilitation

The NNPC boss pointed out that there are huge investment opportunities in the downstream sector, especially in pipeline and depot rehabilitation.

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Crude oil market remains unpredictable- NNPC Boss

The Nigerian National Petroleum Corporation (NNPC) has said that it expects an inflow of about $8.7 billion investment during the rehabilitation of the Warri Refinery and Petrochemical Company (WRPC), the Kaduna Refinery and Petrochemical Company (KRPC), as well as the revamping of some of its 5,000-kilometre pipelines throughout the country.

According to a report from Thisday, this disclosure was made by the Group Managing Director of NNPC, Mele Kyari, while making a virtual presentation titled: “Accessing Energy Infrastructure Opportunities at the NNPC” at an event hosted by the United States Department of Commerce.

Kyari insisted that the corporation remained a destination of choice for investors globally adding that the corporation would require between $ 4.5 billion and $4.7 billion investment for the rehabilitation of the refineries in Warri and Kaduna.

READ: NNPC explains why FG is spending as much as $1.5 billion on Port Harcourt refinery

The NNPC boss pointed out that there are huge investment opportunities in the downstream sector, especially in pipeline and depot rehabilitation, revamping of Liquefied Petroleum Gas (LPG) and building of new Compressed Natural Gas (CNG) plants across the country.

He stated that with an estimated cost of about $4 billion, pipelines and depot rehabilitation would be done through Build, Operate and Transfer (BOT) agreements with competent and duly qualified project companies to be engaged through an open competitive bidding process.

Kyari noted that the successful BOT contractor who shall raise all funds for the project is expected to recover its investment from tariffs by operating the assets and make a profit before transferring the asset back to NNPC.

READ: In a hyperinflation economy like Nigeria’s, these are the best investments to consider immediately

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He disclosed that the NNPC has over 1,700km of backbone gas transmission infrastructure, owns a 49% stake in NLNG, has 5,000 kilometres pipeline network, four jetties, 21 depots, 575 retail stations and 25 pump stations with an annual industry expenditure in excess of $20 billion.

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Kyari noted that the state oil giant will continue with its expansion and rehabilitation of oil and gas pipeline, refineries, and tank farm, including its diversification into other sectors like power, real estate and healthcare businesses.

He said, “Deepening our play, the NNPC shall continue engaging in oil and gas pipelines expansion and rehabilitation, refinery and petrochemical and tank farm and also other gas-based industries like methanol, fertiliser etc.

READ: Nigeria’s energy future: Why investors should look to hydrogen

Furthermore, in a bid to become an energy company of the future, NNPC is diversifying into other high-value sectors like power generation through IPPs, renewable energy initiatives, real estate and healthcare businesses. Our present business model ensures reduction in our carbon footprint by engaging in more environmentally friendly practices and socially beneficial initiatives to host communities and all stakeholders.

Stanbic 728 x 90

This is the time for reputable investors to join the NNPC in the journey into an exciting future that promises high returns on investment with manageable risks and government support through the investor-friendly environment and favourable fiscal terms,” Kyari stated.

Bottom line

The oil and gas industry which is Nigeria’s biggest foreign exchange earner also remains the country’s most important and biggest investment driver especially with the expected full deregulation of the downstream sector of the oil industry and expected passage of the Petroleum Industry Bill, which will also attract huge investments in the upstream sector.

NNPC’s diversification effort in agriculture, information technology and manufacturing will also be a huge boost to the economic development of the country.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Business

Just-in: President Buhari restores ownership of OML 123, 124, 126 and 137 to NNPC

The President has ordered the restoration of ownership of OML 123, others to NNPC.

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Buhari sacks DG National Directorate of Employment, Nasiru Argungu

President Muhammadu Buhari has approved the restoration of the leases on OMLs 123, 124, 126 and 137 to the Nigeria National Petroleum Corporation (NNPC) which is in a production sharing contract with the Chinese government-0wned, Addax Petroleum.

This is in line with the current administration’s rule of law, fairness and enabling a stable business environment for businesses.

This disclosure is contained in a statement issued by the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, through a series of tweet posts on his official Twitter handle on Friday, April 23, 2021.

The President directed the Department of Petroleum Resources (DPR) to retract the letter of revocation of the leases, while also directing NNPC to utilize contractual provisions to resolve issues in line with extant provisions of the Production Sharing Contract arrangement between NNPC and Addax.

What the Presidential Media Aide is saying in the statement

The statement from Garba Shehu partly reads, ‘’In line with the current administration’s commitment to the rule of law, fairness and enabling a stable business climate for investment, President Muhammadu Buhari has approved the restoration of the leases on OMLs 123, 124, 126 and 137 to NNPC Group which is in production sharing contract with Addax Petroleum, a company wholly owned by Government of the People’s Republic of China on the blocks. The leases belonging to the Federation were revoked on March 30, 2021.

‘’This development reaffirms the commitment of President Buhari to the rule of law and sanctity of contracts. While directing the Department of Petroleum Resources, DPR to retract the letter pf revocation of the leases, the President also directed NNPC to utilize contractual provisions to resolve issues in line with the extant provisions of the Production Sharing Contract arrangement between NNPC and Addax.’’

Shehu in his statement also said that the restoration of the blocks to NNPC will boost the organisation’s portfolio, thereby making the corporation to, in the long run, boost its crude oil production and in turn increase the revenue it generates to the Federation Account

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Business News

NNPC, SEEPCO sign gas development agreement for domestic market

The execution of the deal is to help reduce gas flaring in the country and a show of NNPC’s commitment to facilitating the country’s transformation into a gas-powered economy.

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The Nigerian National Petroleum Corporation (NNPC) and an indigenous oil exploration and production firm, Sterling Exploration and Energy Production Company (SEEPCO), both partners in the Oil Mining Lease (OML) 143, have signed a Gas Development Agreement (GDA).

The execution of the deal is to help reduce gas flaring in the country and a show of NNPC’s commitment to facilitating the country’s transformation into a gas-powered economy.

According to a tweet post from NNPC on their official Twitter handle, the agreement between both parties was signed at NNPC’s head office, NNPC towers, on Thursday, April 22, 2021.

The statement says that this latest milestone provides the terms for the development of OML 143 Gas, providing gas for the domestic market which aligns perfectly with the Federal Government’s National Gas Expansion Programme (NGEP).

What this means

The execution of this project will not only help to support the Federal Government’s effort in reducing gas flaring by monetizing it but will also play its part in the government’s effort in the expansion of gas utilization in the country as a cleaner, cheaper and more reliable alternative form of energy.

This is coming at a time when the Federal Government is shifting focus to gas utilization as an alternative source of energy especially with the increase in the retail pump price of petrol. This is one of the various initiatives by the government as represented by the NNPC towards providing alternative sources of energy.

 

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