Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, said the corporation would continue to swap crude oil for refined petroleum products for the next six months in the face of obsolete refineries in the country.The contract, called Direct Sale and Direct Purchase (DSDP), introduced in 2016, was expected to terminate this June, but the state-owned oil firm told journalists at the ongoing meeting of the Organisation of Petroleum Exporting Countries, (OPEC) in Vienna that the pact would remain until end of 2018.Baru also said the group had paid over $5 billion cash-call the country owed oil companies as a measure to attract investment that would boost the oil and gas sector in the country.
Considering that the one year contract, which started around April last year, reportedly gulped about 300,000 b/d of crude oil, the country could swap another 150,000 for the next 183 days to prevent product shortage in the country. Baru, who spoke on “Investment in the Oil and Gas Industry” at the seventh international seminar of OPEC yesterday, stated that some of the measures taken to attract investments into the country include settling all outstanding cash call arrears amounting to $5billion and execution of key projects in the Niger Delta.
According to the GMD, challenges in the sector have created a new wave of opportunities for the corporation because oil is expected to remain the dominant fuel in the energy mix, contributing between 52-53 per cent of the global energy requirement over the next 15 years.
“The balance of objectives requires that we undertake a paradigm shift in our business model to ensure that we attract capital and sustain flow of investment. It has also placed a burden for change towards broadening the base of investment sources outside traditional government funding.
“We have had about $3.6billion in investment so far. The PIB is undergoing serious legislative process. We segmented it into four and one has been passed. The downstream holds the future. We are looking at revamping our refineries and calling on investors to come and establish refineries. We are also looking at job creation across the entire value-chain,” he told participants at the seminar.
He said NNPC would keep sanctity of all contracts so that investors are given the right framework to operate.“The recently sanctioned $2.8 billion, 614Km Ajaokuta-Abuja-Kaduna-Kano (AKK) pipeline project is a demonstration of commitment to investing in local gas development,” he stated.