NNPC Exploration and Production Limited (NEPL), a subsidiary of the Nigerian National Petroleum Company Limited (NNPC), has said it intend to increase its daily production to 550,000 barrels per day from its current production level of 370,000 barrels day by 2027
To achieve this feat, the company may need on the average, about $4 billion on annual basis for the next five years.
Nicolas Foucart, Managing Director of NNPC Exploration and Production Limited (NEPL), a subsidiary of the Nigerian National Petroleum Company Limited (NNPC), this disclosed by at the just concluded Nigeria International Energy Summit (NIES), held in Abuja.
He noted that during the same period the NNPC E&P company will raise gas production to 3 billion cubic feet (bcf).
According to him, in terms of oil production, the activities of NEPL in the upstream differ from those of the NNPC Upstream Investment Management Services (NUIMS), which supervises the national oil company’s Joint Ventures (JVs), Production Sharing Contracts (PSCs), and Service Contracts (SCs) alongside operating partners in the industry.
For years, Nigeria has struggled to meet its Organisation of Petroleum Exporting Countries (OPEC) quota, but this has recently hit the 1.5 million bpd allocation as things begin to gradually pick up in the sector.
He stated that funding still remains a key issue to grow production of both existing and new set of assets, but said the NNPC subsidiary has a clear strategy on this in terms of sustainable production, cost optimisation, decarbonisation and people.
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“So our plan is, from this year’s target, that we have 373,000 barrels average production for the year. That’s our target in 2025. To grow that to 550,000 barrels per day, that’s oil and condensate in the next three, four years. And from that production, we operate 65 per cent of that production.
“If I go to gas, today we are producing 1.4 BCF per day. And our strategic plan is showing that we should achieve close to 3 BCF over the next three, four years. Again, we operate 50 per cent of that production as NEPL.
He stated that, behind that plan, there’s a lot of activities and a lot of investment. If we look at our strategic plan, we are talking about $4 billion per year. That’s NEPL’s equity. Over the next five years, that’s the money we need to invest between OPEX and CapEx.
He asked: “So definitely, where is that fund coming from? And how can we make sure it’s going to be there? So of course, as a company, the fund will come from profit that we are generating. So it’s that’s the self-funding aspect, but also we’ve got external funding.
“So the way we’ve done that in NEPL, we’ve got financing entities, also providing some technical services in certain assets. So we operate those assets, and then there’s a joint team executing the activities. But it’s just to secure those funds from the shareholders, because that’s what it is when it’s self-funded,” he added.
The NEPL boss pointed out that instead of sharing dividends, the NEPL could deploy the fund for financing its activities, explaining that either from shareholders or external entities, it wants to make sure that there is a business case and value behind all the projects.
He maintained that investors were looking for sustainability of projects, noting that at the NEPL, the company has looked back at historical performance and identified the root causes of underperformance over the years.
