Showcasing Opportunities in Nigeria’s Oil Industry

Emmanuel Addeh writes that last week’s two-day Nigeria Oil and Gas Opportunity Fair presented a good avenue for players in the industry to expose both local and international investors to the huge opportunities in the sector

In adapting to the exigencies of the times, especially against the backdrop of the ‘new normal’ imposed by the coronavirus pandemic, the Nigerian Content Development and Monitoring Board (NCDMB) last week organised a virtual bi-annual conference to once again intimate investors of the opportunities in the oil and gas sector.

Essentially, the fair, now in its third year, brought together major players across the upstream, midstream and downstream of the industry, including government agencies, industry regulators and the national assembly to showcase available in-country capacity.

It was an auspicious time for top public and private entities to not just put up an appearance, but aggressively seek to convince their audiences of possible areas of collaboration to grow the industry and the Nigerian economy by extension.

Among several topical issues, some operators and service companies pointed to the opportunities in collocating projects and joint ownership of pipelines and other assets.
From economies of scale to judicious use of scarce resources and available facilities, even down to industrialisation of areas and zones, there were submissions from panelists around benefits of collaboration.

Although online-based, the bi-annual event which held with minimum technical glitches, saw in attendance hundreds of participants, who would perhaps, readily admit that it wasn’t just another talk show, but one that proffered practical solutions to extant challenges.

It also, according to participants, succeeded in fostering institutional collaboration, maximising participation of Nigerians in oil and gas activities, linking oil and gas sector to other sectors of the economy and proposing a pathway for maximising utilisation of Nigerian resources.
For instance, at the event, the Nigerian National Petroleum Corporation (NNPC) drew the attention of serious business financiers to several investment opportunities in its frontier basins, gas fields, pipeline networks as well as its integrated power supply assets.

Themed, “Leveraging Opportunities and Synergies for Post Pandemic Recovery of the Nigerian Oil & Gas Industry,” the corporation’s head, Mr. Mele Kyari, stated that having been ravaged and disrupted by the impact of the Covid-19 pandemic, the industry was in dire need of fresh investments.
Kyari noted that there was the need to foster institutional collaborations, maximise participation of Nigerians in oil and gas activities, and link oil and gas sector to other areas of the economy.

According to the NNPC boss, the oil and gas industry in Nigeria is replete with opportunities from the upstream, midstream to the downstream and even to the services sectors.
He stressed that opportunities abound for potential investors to come into the sector, adding that synergies could be created between the NNPC and potential investors, towards assured value creation and a guaranteed fair share of Return on Investment (RoI).

He said: “In the upstream, opportunities abound in the area of exploration of frontier basins, the development of upstream gas fields and the financing of greenfield/brownfield additional production on de-risked assets.

“In gas and power infrastructure development, there are opportunities in expanding our gas pipeline networks, development of gas-based industries as well as the integrated power plants.
“In line with our aspiration towards becoming net exporter of petroleum products, opportunities abound in the rehabilitation of our existing refineries as well as the construction of greenfield condensate refineries.”

In ventures and business development, he noted that NNPC would partner investors in the development of multi-specialist hospitals to strengthen healthcare service availability and support telecommunication infrastructure availability.

NCDMB’s Executive Secretary, Mr. Simbi Wabote, in his remarks, disclosed that the board is currently eyeing at least $3.7 billion in investments and commercial partnership and had committed a total $332million under its commercial ventures partnership programme to achieve the goal.
Wabote listed some of the partnerships undertaken by the board to include the 5,000 barrels per day Waltersmith modular refinery in Ibigwe, Imo State, NEDO gas processing company in Kwale, Delta State and a 300mmscfd Kwale gas gathering hub.

According to him, other investments include the development of 5,000 metric tons LPG storage and loading terminal facility by Triansel Gas Limited in Koko and construction of energy park, inclusive of a modular refinery, power plant and 40MMscfd gas processing facility at Egbokor, Edo State.

Wabote said the board also partnered Brass fertiliser for the development of a 10,000MT/day methanol plant and 500mmscfd gas processing plant at Odiama in Brass as well as with Rungas Group for the manufacturing of 1.2million composite LPG cylinders annually in Bayelsa and Lagos States.

In addition, he said the organisation was deepening LPG utilisation in the north with the rollout of LPG bottling plants and depots in Kano, Kaduna, Katsina, Bauchi, Nassarawa, Zamfara, Niger, Plateau, Gombe, Jigawa states and Abuja.

“We shall complete and commission composite LPG cylinder manufacturing plants with combined capacity of 1.2million cylinders per annum. We shall commission three other projects dedicated to gas processing, LPG bottling, and production of base oil.

“We shall also commission and commence operations from our industrial parks at Odukpani and Emeyal-1 and commercialise at least one R&D project and close skills gaps in under-water welding and any other core skills required in the industry,” he stated.

Wabote hinted that the impending passage of the Petroleum Industry Bill (PIB), the amendment of the Nigerian Oil and Gas Industry Content. Development (NOGICD) Act, the ratification of the African Continental Free Trade Area (AfCFTA) agreement and the recently approved and gazetted ministerial regulations are some of the policy and regulatory-driven opportunities in the coming years.
Also in his goodwill message, the pioneer Executive Secretary of NCDMB, Mr. Ernest Nwapa, remarked that the oil and gas industry had experienced remarkable and sustainable growth in the last 15 years through local content compared to other sectors.

Also speaking, the corporation’s Chief Operating Officer, Refining and Petrochemicals, Mr. Mustapha Yakubu, announced the NNPC’s willingness to purchase a 20 per cent minority equity stake in Dangote Refinery, Lagos, said to be Africa’s biggest oil refining facility and the world’s largest single-train plant, noting that discussions were already ongoing to that effect.

The 650,000 barrels per day (bpd) integrated refinery, expected to process a variety of light and medium grades of crude, including petrol and diesel as well as jet fuel and polypropylene, is owned by Nigeria’s Dangote Group and is worth an estimated investment of $15 billion.

The top NNPC official stated during the virtual event, that the collaboration would further ensure undisrupted product supply to Nigerians when the deal materialises, noting that one of its divisions, the Greenfield Refining Projects Division (GRPD) was handling the issues relating to completing the agreement.

“We have what we call the green field refinery, and the Greenfield Refining Projects Division (GRPD) of the NNPC. What we do, our strategy is to collaborate and seek strategic partnerships with private investors.
“At the moment, we have Dangote refinery which is the 650,000 capacity barrels per day plus a mini 80,000 tons per annum of petrochemical plant.

“What are we doing there? I can tell you today that we are seeking to have a 20 per cent minority stake in Dangote refinery as part of our collaboration and you know that there’s a huge quantity of crude for that refinery.
“That’s 650,000 barrels, going into a single crude distillation unit (CDU). When that comes on board, it will also wet the nation for us,” he stated.

Yakubu stated that notwithstanding the global push for renewables, Nigeria has a local, domestic and regional market for hydrocarbons, stressing that this part of the world will continue to rely on fossil fuels at least in the next 20 years.

He pointed out that the national oil company was exiting the running of the country’s four refineries, stressing that it has recently called for bids from competent and qualified contractors for that purpose.
Yakubu explained that NNPC was not in the best position to run the refineries, reason it has opted for a new model , the Operation and Maintenance (O&M) for the running of the facilities.

In a post-event comments, the consulting firm which was deeply involved in planning the virtual event, Jake Riley urged state actors, investors, operators, and service companies alike to take advantage of the identified opportunities and not just exit the two-day deliberations like another talk show.

Managing Director of Jake Riley, Funmi Ogbue, stated that the industry must deliberately move away from the regular practice of gathering to recite national issues without a clear path forward, noting that thankfully, that has not been the scenario with NOGOF.

“However, I’m appealing to the representatives of government who participated and committed to driving implementation of key policies and legislation. We need the PIB now more than ever before.
“Prolonged period of uncertainty is dampening the enthusiasm of prospective investors with interests in Nigeria.

“It is true that the contracting cycle is being reduced from what it used to be by service level agreements (SLA), but we need specific enabling laws that will cement these policies and give industry players the confidence of operating in a very competitive environment without fear of sudden interruptions.

“It can’t be business as usual to see Nigeria attract a paltry five per cent of investment inflows into Africa as registered for the period between 2015 and 2019,” Ogbue said.
She said that for instance, the NNPC condensate refinery programme targeting continuous supply of feedstock to mini refineries is expected to gain traction in the coming months with petrol and diesel in view as end products.

“Previous NOGOF had highlighted the potential with modular refineries and the intervening plans by NCDMB. Today, the reality is that modular refineries are springing up in different parts of the country.
“This has broken the jinx that held 40 out of the 44 active licensees back as of 2018 from translating their licenses into actual projects,” Ogbue noted.

Ogbue used the opportunity to appreciate the executive secretary of NCDMB for the opportunity granted the company to organise the event and thanked the opportunity presenters, sponsors, panellists, media partners and the organisation’s team.

Aside Kyari, Wabote and Yakubu, some other top industry stakeholders who spoke at the event included the Minister of State, Petroleum, Mr Timipre Sylva, NNPC’s Chief Operating Officer, Upstream, Adokiye Tombomieye as well as General Manager , Business and Government Relations at Shell, Bashir Bello.

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