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In Focus:
Nigerian National Petroleum Corporation (NNPC)
In order to manage all government interests in the Nigerian oil industry, both upstream and downstream, the state-owned and controlled Nigerian National Petroleum Corporation (NNPC) was established in 1977. Its activities span exploration, production, refining and products distribution. It even markets petroleum products to the public through its continuously growing number of retail outlets.Supporting the NNPC in its efforts to significantly grow the gas production capacity, the Nigerian Government has introduced the following measures:
– the Natural Gas Policy promoting a public-private part-
nership for the orderly and rapid commercialization of Nigeria’s natural gas resources
– the Fiscal Reform providing generous fiscal terms for oil production and gas utilization
– the Gas Master Plan facilitating timely and cost effective gas capacity additions to meet unprecedented global and domestic gas demands
Local Content Initiative to Promote Nigerian Participation
The NNPC strongly supports the Federal Government’s Local Content Initiative. It intends to build local capacities in the Nigerian oil and gas industry and to enable Nigerians participate actively. The industry has achieved 37% of its projected target of 70% by 2010 without comprising quality, health, safety and environmental standards. Therefore, the NNPC has submitted a draft Nigerian Content Development Bill, introduced its own Nigerian Content Division in 2005 and established a Joint Qualification System, providing a data-base of available contractors and suppliers to the Nigerian petroleum industry. The Corporation and some leading Nigerian banks also created the USD350m Nigeria Content Support Fund. The Fund is to enable Nigerian Entrepreneurs access needed capital to execute projects in the industry.
The NNPC expects the oil and gas industry to finally become an economic engine for job creation and national growth in Nigeria. Other new initiatives were also started and progressed by the NNPC, for the purpose of ensuring that there is added value to the nation’s petroleum resources and that the industry galvanizes the Nigerian economy.
Gas Monetisation
Government‘s strategic objective of realizing as much revenue for gas as from oil is being met through many gas-related projects. Following on the heels of the NNPC/Agip Kwale – Okpai Independent Power Project commissioned April 2005, most of the JV partners now integrate IPPs into their oil and gas projects to help boost local power supply.
The Nigeria LNG project on Bonny Island is expanding
rapidly, and new projects like Brass and OK LNG project
sare progressing. These will utilize more natural gas for export to yield revenue for the nation and stakeholders. Apart from generating revenue, these and many more gas utilization initiatives will reduce gas flaring and its environmental impacts.
Floating Mega Stations
In addition to its existing mega stations, and, as part of our efforts to ensure ready availability of petroleum products and stabilize products prices in the Niger Delta region, government, through NNPC, is establishing Floating Mega Stations in the creeks of the Delta. Six of such are at different stages of completion.
Renewable Energy
For a long time, the NNPC and indeed the oil and gas industry has been an insular sector, concerned mainly with oil exploration, production, refining and marketing. Of recent, however, the NNPC has been pursuing policy towards ensuring that it plays a more strategic role towards energizing the larger Nigerian economy. For instance, by its renewable energy initiative, large plantations of sugar cane and hectares of cassava will need to be cultivated by farmers to feed the ethanol project being implemented by the Corporation and this will improve the lot of our farmers on a sustainable basis. The ethanol so produced will be utilized by mass transit and other commuter transport, thereby reducing the need for large scale supply of premium motor spirit (petrol).
The above initiatives and many more are being implemented by the NNPC to ensure that the Corporation becomes a world class player.
Group Managing Director
Engr. Abubakar Lawal Yar`Adua
www.nnpcgroup.com
