INTERVIEW: AKK Pipeline Project Will Fast-track Nigeria’s Industrialisation —Eyesan, NNPC’s Chief Strategy Officer
The Chief Strategy and Sustainability Officer of the Nigerian National Petroleum Company Ltd, Oritsemeyiwa Eyesan, in this interview on Arise TV which was monitored by THE WHISTLER spoke on the NNPC’s footprints in the oil and gas industry, the impact of the projects being implemented by the National Oil Company, and how the Petroleum Industry Act 2021 has served as an enabler in positioning the NNPC to achieve it’s mandate of energy security for Nigeria. EXCERPTS…
In recent times, the NNPC has come under criticisms about the delivery of some projects and this has made people to wonder if the the NNPC has carried out any project successfully. What do you say to this?
Indeed NNPC has carried out very successful projects. The NNPC is an organization that is responsible for managing the government’s upstream sector. And we have done this very successfully. We grew production to 2.4 million barrels in 2019, which was one of the highest we have attained in the history of NNPC. And that didn’t just come by accident but it was a concerted effort over the years.
At some point in our history, we had accumulated quite a lot of Cash Call Arrears going from the government’s inability to meet its cash funding.
Our partners went up in arms to say they were not going to invest in oil upstream and now, we brought them to the table, the GMD at the time made a deal with the International Oil Companies, and we resolved our differences by coming up with a Cash Call Repayment Arrears. This brought the IOCs back to the business and from their concerted efforts to join hands with us in growing the industry, we grew production to 2.4 million barrels sometime in 2019.
Unfortunately, COVID-19 came and we saw the mass destruction all around the world globally. That also affected us. And unfortunately for us in 2022, we got hit by the insecurity challenges in the Niger Delta. It also affected our production. Stepping away from the upstream industry, there are several things we have done. The decade of gas declared by the Honorable Minister of State for Petroleum Resources is another one in the right direction to go in the Nigerian economy. The NNPC has singlehandedly pushed the infrastructure development in the country.
Today they are pushing through the OB3 pipeline which is going to be transporting gas from the east, and west and taking it straight to the North from the AKK pipeline. This project is very much on course and it’s progressing. A few of the human benefits that NNPC has brought to this nation. Without NNPC the petroleum use of this nation will be grossly impacted. And we have done all we can to make sure that the government gets a fair share.
Now take the old and new NNPC, before the PIA enactment, the industry was more or less moving into a comatose space. The IOCs especially those in the deep offshore, were challenged because of the dispute we have had with the deep offshore physicals, and with the enactment of the PIA, we saw a reversal of some of those very stringent fiscals for deep offshore. And today we have the deep offshore contractors. They have a very keen interest and are coming to the table to discuss their plans in opening up a deep offshore terrain where we have huge gas resources. I believe that the new NNPC has been enabled by the PIA to run as a commercial venture.
Work has been ongoing now for a while in our refineries, what is the state of our refineries and what has NNPC achieve with it lately?
In terms of our refining capacity, we have not hidden the fact that in the past, we haven’t done well in maintaining the refineries, and again, this challenge has been the cause of the paucity of funding for the sector by the government.
However, we know we haven’t done very well, but in recent times, we have taken the bold step to say we can bring these refineries back on stream. And we are working assiduously to get there. Yes, we are currently facing a few delays in getting up the refineries, but we are very confident that the refineries will work. There is already progress in Port Harcourt, Warri is already on stream, and Kaduna refineries are.
And apart from our domestic refineries, to ensure that we secure energy security for this nation, we have taken a very active interest in energy participation in the Dangote Refineries. We even augment what we have because we believe that apart from Nigeria, we are also looking into the sub-region because Nigeria as a nation has a way out to pull the sub-region together even from refining capacity.
Experts have said that if the NNPC is going to make progress, it is advisable to use the Nigerian Liquified Natural Gas template, because they have been able to raise an assets base of over $11bn and generated over $90bn in revenues, is that something the NNPC could learn from?
If we look back to the PIA, it contemplates that we could metamorphose our upstream into IJV, where we have just one organization rather than you have the operator, and the operator will be different from the non-operator. We have one operating entity that runs the business. Yes, we agree that the NLNG model is successful, and its model is already contemplated in the PIA. As the new NNPC company, we are already looking into implementing some of our arrangements.
You mentioned the challenges of fixing the refineries and also an aspect of the AKK gas Projects, speak to us about the gains of today’s NNPC?
The AKK project is progressing, and it’s one project that will enable us to industrialize in this country. In 2019 when this current management team came into office, the project was more or less stalled. However, since the coming of this management in 2019, we have taken the plunge and we have progressed in the project. And once we finalize the OB3 river crossing, which has been a sticky part of the project which we are hoping to get past the next couple of months, we will be moving gas from the South to the North and even to the West African sub-region, also to North Africa. Now we are talking about moving almost six billion Standard Cubic Feet of gas per day in addition to what we are currently doing. I think this is a commendable effort the FG has supported in the past. The NNPC solely has taken the plunge to ensure the actualization of this project.
So I believe that we are on course, we have had some temporary setbacks, but we have deployed all technical expertise to overcome the setbacks and we see the light at the end of the tunnel. Before the end of the year, we will require a lot of opening up of gas utilization projects, a lot of power plants are coming up in the AKK corridor.We are looking at three power plants in the first instance and more to come on the drawing board as well.
Apart from the industry, we are also looking at a lot of gas-based industries springing up as a result of the AKK gas pipelines running through. And also tie it to the trans-Sahara pipeline. For us in NNPC, we are confident that we are very much on course and believe that the decades of gas will be actualized.
It is said that the Chinese have pulled out from the AKK deal because as they are concerned, figures have been sized up, what would you say to this?
Yes, the Chinese pulled put of the project, we started the project in partnership with them, they did pull out but regardless of that we have continued the project. We have been able to release our own funds to complete the project and it’s very commendable for NNPC. I also believe that we are discussing with other investors to see how we can possibly expand and deliver on the field of gas.
The NNPC recently expanded its retail business with their position on the OVH and this is expected to lead to the growth in market share and footprint in the West Africa sub-region. Take us up to speed on that?
One of the things NNPC has been focused on right now is to expand our footprint, not only in Nigeria but outside the country shore. Because we believe that we can aid the development of the sub-region. We believe we have the resources and the market space moving forward to enable the entire West African sub-region areas.
For us, we looked at the struggles we had in growing the retail market as a major oil producer. Unfortunately, We struggled in growing our market share and that led to our decision to OVH. And today we own our market share, not only by acquisition but by virtue of the synergy that we have brought to the table. We are looking towards expanding our footprint. Our participation in the Dangote refineries is an enabler in actualizing our vision of expanding our footprint across the sub-region.
We see Nigeria as a major game changer of the sub-region, today the issue of sustainability, energy transition is been held at very high quota.