NNPCL Flags Currency Crisis As Barrier To Investment

…Gas demand may hit 12.2 BCF/d by 2030s, NUPRC projects
The Nigeria National Petroleum Company Limited (NNPCL) said currency volatility remains a major obstacle to investment, stressing that exchange rate fluctuation casts uncertainty over potential returns.

Speaking at the ongoing 41st Nigerian Association of Petroleum Explorationists (NAPE) Conference in Lagos, yesterday, the Group Chief Executive Officer (GCEO) of NNPCL, Mele Kyari, who was represented by Executive Vice President, Upstream, Oritsemeyiwa Eyesan, stated that naira depreciation and contracting processes are also challenges.

He emphasised that addressing sector challenges through collaborative efforts among stakeholders would stimulate investments.

Kyari mentioned that NNPC is determined to transform its operations, anticipating a noticeable shift as it actively attracts increased investment in the oil and gas sector.

“No investor is Father Christmas when they are not assured of a return on investment. Technology deployment is also not enough, as the country could not deploy cutting-edge technology. We must foster collaboration and hold people, including NNPCL, responsible for delivering on promises made,” he said.

Also, the company stated that the $2.8 billion Ajaokuta–Kaduna–Kano (AKK) gas pipeline project, being constructed by Oilserve Limited would be inaugurated next month.

Eyesan emphasised the need for a refined financial model to address delays, stating that a more stable financial system is crucial for successful delivery.

NNPCL announced its return to the negotiating table, aiming to revive two stalled LNG projects. The organisation revealed that it is actively involving foreign investors to ensure the successful realization of the projects.

Kyari urged stakeholders in the oil and gas sector to embrace change, innovate, and take a leading role in the dynamic global energy scene.

He emphasised the crucial impact of oil and gas exploration on shaping the industry’s future, highlighting the importance of dedication, expertise, and a commitment to acquiring knowledge to explore new frontiers and advance technological and economic boundaries.

The NNPCL boss underscored the company’s commitment to incorporating exploration, advancing renewables, promoting innovation, embracing emerging technologies, and implementing portfolio management as fundamental factors for achieving success in the ever-changing energy environment.

Meanwhile, the National Upstream Petroleum Regulatory Commission (NUPRC) has projected that the demand and supply for natural gas in Nigeria are expected to grow from eight billion cubic feet (BCF) per day in 2020 to 12.2 BCF per day by 2030.

The Chief Executive Officer of the Commission, Gbenga Komolafe, represented by Director, Geoscience, Benjamin Ewuga, highlighted the need for increased investments to meet the growing demand for gas.

He emphasised the necessity for a thorough review of the upstream agenda to encourage investment and urged International Oil Companies (IOCs) and the Federal Government to comprehend the actual challenges and engage in constructive business negotiations.