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Investing in Extractives

(Oil & Gas)

Talking points by

Dr Emmanuel Ibe KachikwuHonourable Minister of State – Petroleum Resources

Federal Republic of Nigeria

Delivered by Engr. Suleiman, Rabiu

Group Executive Director/Senior Tech. Advisor to Hon.

Minister of State, Petroleum Resources

At the

UK – Nigeria Trade & Investment Forum 2018

Central London

April 17, 2018

Contents

Introduction

Current Initiatives

Investment Opportunities

Concluding Remarks

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▪ 4 international airports and major seaports in Lagos, Calabar and Bonny Island

▪ 3,798 km of railwaytracks and 168,000km road network

▪ Land borders with Benin, Cameroon, Chad & Niger and a natural hub for the region

5’45” Cairo

5’40”Johannesburg

5’ Dakar

5’20” Addis Abba

3’05’ Tunis

198.7 TcfGas reserves

36.7 Billion Oil+ Condensate

Reserves

Advanced TechVast untapped

opportunities in 3D, 4D etc.

N31.6 Trillion Nominal GDP as

@Q4 2017

1.92%YoY GDP growth rate @ Q4 2017

31220Retail Outlets

285 fields For 44 Oil producing

companies

91.32%Contribution of

Non Oil Sector to the GDP

$47 BnForeign Reserve

Introduction - Nigeria is strategically located in Africa

Source: National Bureau of Statistics, Q4 2017 data

DPR - Nigeria Oil and Gas Industry Annual Report,

ENCOURAGING, PROMOTING AND COORDINATING INVESTMENTS IN NIGERIA, NIPC presentation to Deloitte Nigeria economic outlook, 2018

198 MillionPopulation with a large,

flexible skilled and unskilled workforce

2

Stabilize the

Macroeconomic

environment

Nigeria’s Economic Recovery & Growth Plan (2017- 2020)

Align Monetary,

Trade & Fiscal

Policies

Accelerate

non oil Revenue

generation

Drastically

cut costs

Privatize

selected public

enterprises

/assets

Achieve Agriculture and

Food Security

Improve Transportation

Infrastructure

Drive Industrialisation

focusing on SMEs

Deliver on

Agricultural

Transformation

Ensure Energy Sufficiency

in power and petroleum

products

Urgently increase oil

production

Boost local Refining

for self sufficiency

Expand power

sector Infrastructure

President Buhari has set out the tough choices we have to make as a nation …

Deliver targeted high

priority Transport

projects

Enable private

sector financing of

Infrastructure

Improve Ease of

doing business

Accelerate the

Implementation of

National Industrial

Revolution plan

ERGP Focus ‘Labs’ are currently ongoing to address priority issues and potential solutions, also

integrate key recommendations into a consolidated high quality implementation program

3

Oil & Gas (Extractive) Industry Roadmap - Initiatives

The ‘7 Big Wins’ being implemented will enable a stabilized Oil & Gas landscape with improved transparency and efficiency and stable business environment

The Nigeria Oil & Gas Roadmap

▪ Review and gazette policies and regulations; National Oil Policy. National Gas Policy, Fiscal Reform Policy and pass the Petroleum Industry Reform Bill

▪ Improve the Business Environment by removing barriers to entry and drive investments in upstream, midstream and downstream

▪ Accelerate gas revolution by developing infrastructure, promoting domestic utilisation of LPG and CNG, commercialising gas flares and increasing gas to power

▪ Increase Refineries Local Production capacity through private sector led revamp of existing refineries and enabling new greenfield and modular refineries

▪ Improve Niger Delta Security across environment, infrastructure, capacity building and economic empowerment

▪ Increase Transparency and Efficiency in the Sector by building capacity, enabling the use of IT and automation and entrenching performance management

▪ Improve Stakeholder Management and International Coordination by managing relationships, international relations and bilateral coordination

Key Focus Areas

A Programme Management Office is in place that tracks implementation and escalates issues for resolution

4

Progress made on Reforms

Business Environment

& Investment Drive

Niger Delta Security &

Environment

Transparency &

Efficiency

Gas RevolutionNew Policies &

Regulations

Refineries & Local

Production Capacity

Stakeholder

Management &

International

Coordination

• National Oil Policy approved by

FEC and gazetted

• National Gas Policy approved by

FEC and gazetted

• Developed National Petroleum

Fiscal Policy and syndicated with

stakeholders

• Legislative activities ongoing on

the Petroleum Industry

Governance, Host Community,

Administrative and Fiscal Bills

• Improved fiscal terms

• Cost based incentives to

production based incentives.

• Clear delineation between

upstream, midstream and

downstream operations

• Inclusion of Cost control tax

inversion penalty and lower

Hydrocarbon tax to improve

savings index.

• Nigeria Gas Flare

Commercialization

Programme launched and in

progress.

• Domestic LPG Penetration

program ongoing

• Major backbone pipeline

infrastructure projects

ongoing - Ajaokuta – Kaduna

– Kano pipeline (AKK),

Escravos – Lagos, Odidi –

Warri, OB3

• Private sector led revamp of

existing Refineries being pursued

• Audit of existing refinery licenses

and revised guidelines new

greenfield/modular refineries

• Identified 10Nos licensed projects

that can break ground for

acceleration

• Export of crude oil from Republic

of Niger to Nigeria initiative is

gaining momentum

• Key Stakeholder

engagements in the Niger

Delta with positive impacts

on crude production ramp to

~2mmbpd in Apr 2017 from

1.1mmbpd in Aug 2016

• Developed first ever Niger

Delta Development compact

(Strategic Implementation

Work Plan for development

in the Niger Delta)

• Negotiated cashcall arears

and emplaced a new self

sustaining framework - All

2017 JV calls paid in 2017

• Established monthly

reporting of Key

Performance Indicator (KPI)

dashboard for all MPR

agencies

• Contracting cycle being

streamlined to 6 months

• Crude oil tracking in view

• Rallied OPEC and

Non-OPEC members

and ensured the

stabilization of the

global oil market

• Obtained exemption

from OPEC and non

OPEC production

freeze

• Driving ongoing APPA

reforms – Nigeria

appointed as chair

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▪ Nigeria is committed to eliminate the practice of gas flaring; has ratified the 2015 Paris Climate Accords (COP 21) and endorsed the Global Gas Flaring Reduction Partnership (GGFR) 2030.

▪ As such, the Federal Government launched a new Gas Flare Commercialisation Programmein December, 2016 as a high priority strategy for the Government in achieving the national mandate for flare-out by 2020.

▪ The Gas Flare Commercialisation Programmelays out a framework for Government to license gas that would otherwise have been flared to technically credible and financially sound 3rd party private sector players.

Nigerian Gas Flare Commercialization Program – Initiatives

Expected Wins and Potential Impact

Investment Opportunities in Oil & Gas

$13-17bn

▪ Marginal field program

and licensing rounds

▪ Development of upstream

gas fields with a total of

~37.4 TCF

▪ NPDC funding

▪ Nigerian Gas Flare

Commercialization program

▪ Gas Revolution Industrial

Park at Ogidigben FTZ

▪ Gas to power, fertilizer,

petrochemicals etc.

$14-17bn

▪ Rehabilitation/upgrade of

the 3 refineries

▪ Licensing & Establishment

of greenfield/ Modular

Refineries

▪ Collocating a refinery

within existing refineries

▪ Construction of pipeline

from Republic of Niger and

new refinery in Northern

Nigeria

$3.5-7.0Bn ▪ Revamp of LPG and

building of new CNG

plants across the country

▪ Pipeline and storage tank

construction

▪ New depots, jetties,

terminals

$0.7-1bn

$3-3.9bn

▪ Equipment Leasing (rigs,

FPSOs)

▪ Fabrication and

construction

▪ R&D partnerships

▪ Infrastructure security

The Nigeria Oil & Gas Industry offers investment opportunities of over $50Bn

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In summary…..

▪ The Federal Government of Nigeria has launched

a National Economic Recovery and Growth Plan

(ERGP) for the next 4 years

▪ This is anchored on the Nigeria Oil and Gas

Roadmap, among other sectoral roadmaps

▪ This roadmap presents exciting opportunity for

financial and strategic partnerships in excess of

$50 Bn

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Current Status

(Backbone

Infrastructure)

ON-GOING:

1. OB3 (Obiafu/Obrikon – Oben) is a 130KM by 48’’ Pipeline. Overall EPC progress is 85.32%. Target Completion date is 31st July 2018. (2 bcfd pipeline capacity)

2. ELPS (Escravos–Lagos Pipeline System) 2 ( 342 KM 36’’ Pipeline). Overall EPC Progress is 96%. Target Completion date is end of 2nd Quarter 2018. (1.1 bcfd pipeline capacity)

3. AKK (Abuja-Kaduna-Kano Segment) 614KM by 40’’ Pipeline). Secured FEC approval to commence EPC.

4. Odidi Warri Gas Pipeline Expansion Project(30Km by 40’’ Pipeline)

5. 7 Critical Gas Development Project(7CGDP): This will develop Gas Resources and

processing facilities that will inject about 3 bcfd of gas by 2020 to domestic

market(Gas Volumes will come incrementally). ANOH CPF (Assa North Ohaji South

Central Processing Facility): Has two streams each of 300mmscfd

capacity.(Award/Tendering ongoing; Seplat and Shell are progressing this CPF

development). First Gas for ANOH is expected by Q4 2019.

PLANNED

1. Obigbo to Ajaokuta : 36’’ by 406KM Pipeline

2. Early Gas (QIT to OB/OB ; 36’’by 219KM Pipeline. Cawthorne Channel to OBOB Pipeline ; 20’’ by 130KM)

3. EWOGGS (East - West Offshore Gas Gathering System); 2 Nos. 38’’ by 530KM Pipeline

4. ELPS – Ibadan – Ilorin - Jebba (EIIJ) Gas Pipeline Project

Infrastructural Projects – Planned and On-going