OGRepublic August Edition

NIGERIA OIL & GAS
ND Western Calls for More Private Investment in
Nigeria's Frontier Basin Exploration
The Managing Director/Chief Executive
Officer of ND Western, Eberechukwu
Oji, has called for more private
investment participation in the Nigerian
frontier basin exploration.
Speaking in an exclusive interview with
PUNCH, Oji said it is high time Nigeria maximise
the abundant oil and gas reserves, whilst
making further investments in exploration.
He further explained that some section of the
recently passed Petroleum Industry Bill (PIB),
mandates a percentage for frontier basin
exploration. He added, “is a mistake and should
be corrected.”
According to Oji, the country’s focus should be
on diversifying its economy by building a strong
and well-funded sovereign wealth fund to
drive the diversification agenda.
The PIB as passed by the National Assembly
mandates that the new Nigerian National
Petroleum Corporation (NNPC) should be
spending 30 per cent of its profits on oil
exploration in the frontier basins.
Eberechukwu Oji, Managing Director/Chief Executive Ofcer, ND Western
“In my view, capital allocation is best handled
by competent managers of any corporate
organisation of the size of the new NNPC.
Mandating a percentage for frontier basin
exploration is a mistake and should be
corrected,” Oji said.
“If anything, we should be seeking to diversify
the Nigerian economy by building a strong and
well-funded sovereign wealth fund to drive the
diversification agenda. We need to invest more
in gas as a transition fuel, invest in renewables
to future-proof our economy and channel our
available funds to the most important resource
that Nigeria has which is her people.
“Aggressive human capacity development in
the frontier basin is guaranteed to pay more
long-term dividend than a certain per cent
profit allocation for exploration in the same
basin.”
Oji has an extensive experience in the oil and
gas industry, and had worked in several
jurisdictions including the Netherlands, UK and
much of Europe, Singapore and far East Asia up
to Australia, Kazakhstan, India, the United
States, and so on.
On how the country can attract investments to
achieve the Decade of Gas plan, Oji said that
with the right investment friendly policies and
securitisation of investments, about $40 billion
needed to achieve the potential of the plan can
be achieved.
“Look at the NLNG Train 7 example. Over $10bn
was needed but this was massively
oversubscribed even during the lock-down,” he
said.
“In simple terms, it is possible to attract this
level of investment if our policy trust as a nation
is specifically aimed at attracting these
investments.
“The investment dollars are there but it will go
where the most enabling environment has been
created for it. That’s the challenge for our policy
makers.
“As you can understand, Nigeria is in a global
competition for investment dollars. New
investors will be taking a hard look at the
experience of existing investors before they
come in.
“These things are not so complicated. You can
look at NLNG case and replicate the conditions
that attracted such massive oversubscription
for Train 7, and you will attract the needed
investment. The same is applicable in deep
offshore. Look at the Production Sharing
Contract terms that enabled Bonga investment,
you replicate the same, of course benchmarking
with new deep offshore basins like Guyana,
Suriname etc and you will attract the needed
investment dollars.
“My advocacy is, treat your existing investors
well so that new ones will come in and we need
to replicate what we have done in the past that
worked very well as in the examples I have
given.”
Speaking on the ND Western aim to double its
current gas production capacity to 600 million
standard cubic feet per day by 2022, he
disclosed that the company is working to
achieve a production capacity of 400mmscfd by
the end of this year.
He said, “Our development of gas resources is
driven by market gas demand. We have drilling
campaigns which are undertaken within the
timeframe to take our production capacity to
600mmscfd by 2022 and our aim currently is to
achieve production capacity of 400mmscfd by
end 2021.
“The gas market in Nigeria must mature enough
to absorb all that we can produce. We are
aligned with the conventional wisdom of
developing gas supply to match demand. This is
because you cannot store gas unless you liquefy
it. You want to sell the gas to a paying customer
before you make the investment to drill a nonassociated
gas well.
“We are in the process of finalising gas purchase
agreements for these extra volumes of gas
before we commence the drilling campaign.
“With the completion of the AAK pipeline which
opens more opportunities for our gas demand,
600mmscfd is not far from our reach.”
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