Nigeria needs $7bn annually to up oil production – Baru

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, has said the nation’s oil industry will need $7 billion annually to achieve incremental production to meet its 40 billion barrels oil reserve target by 2020.

Besides, the NNPC helmsman also called for the creation of an oil industry fund pool to ensure sustainable funding of the sector to unlock incremental production growth.

Baru, who was speaking yesterday in Lagos at the Society of Petroleum Engineering (SPE) 2018 annual international conference and exhibition, said without adequate funding of the sector, it would be difficult to meet the target.

“Nigeria wants a selffunding and self-sustainable oil industry. Over the past 10 years, the industry has witnessed 50 per cent reduction in capital expenditure because of lack of fund mainly on JV projects. As of today, we have a shortfall of over 550,000 barrels of oil per day when compared with production baseline of 2010 despite efforts that were made on alternative funding arrangements and PSCs funding.

“To cover the gap and ensure growth, we require an estimated annual capital funding of $7 billion,” he said

Speaking on the theme ‘Diversification of the Nigerian Economy - The Oil and Gas Enabler’, Baru said strong financing of the sector is important to the sustenance of the industry.

“To ensure funding does not hinder the industry’s growth, the corporation is looking at both the traditional and non-traditional funding arrangements, hence the need to look at commercial debt instrument or partial funding. Other nontraditional funding include contractor financing, penson fund sources, primary equity sources,” he said.