Business Opportunities in Nigerian Oil and Gas Sector

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2. Worldwide Oil and the Gulf of GuineaOverview of Nigerian Oil and Gas IndustryThe Growth AgendaEmerging Commercial OpportunitiesKey Enablers and InterventionsConcluding Remarks. . CONTENT . 3. In both oil and gas, there has been a band shift in costs occasioned by supply snugness and developing interest. Secure supplies is accordingly a noteworthy motivation issue for the worldwide oil and gas industry and

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Business Opportunities in Nigerian Oil and Gas Sector Engnr. Funsho Kupolukun Group Managing Director Nigeria National Petroleum Corporation Gulf of Guinea Breakfast Session OTC 2007, Houston May 2, 2007

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CONTENT Global Oil and the Gulf of Guinea Overview of Nigerian Oil and Gas Industry The Growth Agenda Emerging Commercial Opportunities Key Enablers and Interventions Concluding Remarks

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GLOBAL OIL AND THE GULF OF GUINEA Price Shifts In both oil and gas, there has been a band move in costs occasioned by supply snugness and developing interest. Secure supplies is in this way a noteworthy plan issue for the worldwide oil and gas industry and additionally governments alike

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GLOBAL OIL AND THE GULF OF GUINEA Growing Importance of Gulf of Guinea Whilst OPEC remains the essential purpose of call for worldwide limit options, the Gulf of Guinea nations, especially Nigeria and Angola, are developing as geo-deliberately vital providers to the worldwide market, especially to the USA

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GLOBAL OIL AND THE GULF OF GUINEA Gulf of Guinea Prospectivity Deepwater Comparative Reserves Deepwater Discoveries The Gulf of Guinea's developing significance is bolstered by an abnormal state of prospectivity. Right around 40% (14 bn bbls) of worldwide deepwater disclosures have originated from this area. About portion of this is from Nigeria. Late disclosures have conveyed the district to the bleeding edge of deepwater innovations

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THE GULF OF GUINEA Projected West African Crude Oil Output World Average 3% From this hearty base, a huge commitment is required from this locale to worldwide limit. An expected 7mmb/d or 9% of universes aggregate every day creation is relied upon to originate from this district in 2007. With respect to the world normal of 3%, generation limit development in Africa (particularly Gulf of Guinea) is gauge to be most elevated at around 7% yearly

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CONTENT Global Oil and the Gulf of Guinea Overview of Nigerian Oil and Gas Industry The Growth Agenda Emerging Commercial Opportunities Key Enablers and Interventions Concluding Remarks

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THE NIGERIAN OIL AND GAS INDUSTRY Nigeria In the Gulf of Guinea Reserves Production Nigeria is a key segment of the Gulf of Guinea. It speaks to 70% of aggregate Gulf of Guinea saves and is the grapple nation for the district as far as supply

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THE NIGERIAN OIL AND GAS INDUSTRY National Aspiration for Oil and Gas Recent Presidential Mandate Core Sector Aspirations Grow Crude oil stores to 40bn barrels by 2010 Production ability to 4.5mmb/d by 2010 Gas incomes to match unrefined petroleum incomes Domestic gas market and address natural issues Maximize part an incentive to the Nigerian economy Improve Nigerian limit and substance in industry Enhance multiplier impact on economy Transit oil to a coordinated oil and gas economy … Attain a GDP development rate of 10% Nigeria's yearnings for its oil and gas industry are tied down on 2 key components – limit development and financial mix of the business with the large scale economy. The country tries to develop GDP at a 10% rate. The key push is along these lines that of arrangement amongst worldwide and household targets.

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THE NIGERIAN OIL AND GAS INDUSTRY 7 Industry Focus Areas Crude Oil Capacity Growth Aggressive investigation and advancement to capture creation decrease and develop ability to 4mmb/d by 2010 Enable/Sustain Linkage of Industry to Economic Growth Aggressive improvement of the National Content Agenda to encourage producing and mechanical limit development The Renewable Energy Initiative to fortify agribusiness segment development The Marginal Fields Initiative to animate neighborhood support Stimulating Gas Sector Growth Aggressive development of fare segment to use advancing open doors in worldwide development in gas Stimulate household segment gas development to support monetary development To convey the goals, between 1999-2007, the industry has refocused deliberately on 7 key zones imperative to adapting to the quickly advancing worldwide and nearby industry scene. These 7 ranges have moored industry operational concentration and the accomplishments to date

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THE NIGERIAN OIL AND GAS INDUSTRY 7 Industry Focus Areas Stimulate Downstream Product Availability and Growth Refinery execution change Retail outlet development Private division interest in item promoting Develop Sustainable Financing Solutions for the Industry Activity Developing Legal and Fiscal Environment to Support Sector Aspirations Develop Organizational Capacity in NNPC to Manage and Exploit Evolving Industry Challenges and Opportunities Respectively

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THE NIGERIAN OIL AND GAS INDUSTRY Performance Update - Reserves Growth 59% expansion Reserves have kept on developing consistently in Nigeria. More than 7bn bbls have been found in the deepwater acreages bringing the aggregate national unrefined petroleum stores to around 35bn bbls from around 22bn bbls pre 1999. Huge extension for stores development still exists

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THE NIGERIAN OIL AND GAS INDUSTRY Performance Update – Production Capacity Growth Similarly, creation limit has developed relentlessly to an introduced limit of around 3mmb/d in 2007. All the more as of late in 2005/2006, an extra 790mmboed was added to the countries supply limit. Basically regardless of real interruptions to generation, the industry has possessed the capacity to maintain creation at inside quantity restricts in perspective of the vigorous and different supply base

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THE NIGERIAN OIL AND GAS INDUSTRY Performance Update - Gas Sector Steady drop in % gas flared % Flared Gas flares have decreased essentially to around 32% by end 2006. Critical development in residential and fare gas use will end flares by 2008.

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NLNG 22 Mtpa LNG, 3.5 Mtpa NGLs BGT L N G 24 devoted LNG tankers THE NIGERIAN OIL AND GAS INDUSTRY Performance Update - Gas Sector Highlights Total Investment - $11.4 bn T12 began 10/99 T45 FID 03/02 T3 began 12/02 T6 FID 07/04 T4 began 07/05 T5 began 12/05 T6 RFSU 2008 ~$1.5 bn 3 rd Party financed USD 569million profit Over 500 cargoes conveyed NLNG was authorized in 1999 with 2 Trains at startup. It has since extended quickly to 5 prepares by 2005 and the 6 th is gotten ready for appointing in 2008. To date, the NLNG extend has conveyed over $3.6bn in incomes to Nigeria, some portion of which has been reinvested for further development.

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CONTENT Global Oil and the Gulf of Guinea Overview of Nigerian Oil and Gas Industry The Growth Agenda Emerging Commercial Opportunities Key Enablers and Interventions Concluding Remarks

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THE GROWTH AGENDA Crude Oil Capacity - Future Capacity Growth To convey the GDP goal and in addition add to worldwide economy development, Nigeria needs to develop limit fundamentally. The part has amassed and is advancing a hearty arrangement of ventures wanted to develop ability to around 4mmb/d by 2010. The portfolio includes a blend of deepwater and routine landscape ventures

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THE GROWTH AGENDA Overview of Key Projects – Conventional Terrain Over 2.0mmb/d extra limit is arranged from the shallow seaward concessions between 2006 - 2011.

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THE GROWTH AGENDA Overview of Key Projects – Deepwater Terrain Over 1.0mmb/d of extra limit is foreseen from around 7 noteworthy deepwater ventures.

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THE GROWTH AGENDA Gas Sector Growth In gas, there is a noteworthy change in estimate usage for both the local and fare area. Local request will develop to around 1000mmscf/d by 2006 and conjecture to develop to more than 10,000mmscf/d by 2010. LNG limit has similarly developed from zero to 22MTPA in 2006 and conjecture to develop to 50MTPA by 2011 – second quickest development on the planet. Nigeria's estimate gas development is one of world's most forceful

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THE GROWTH AGENDA Gas Sector Growth – Diverse Portfolio Opportunities Underpinning the gas request development is a powerful arrangement of ventures. The portfolio involves Methanol, GTL, Power and Fertilizer ventures

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THE GROWTH AGENDA Major Export Projects - LNG Projects NLNG limit estimate 30MTPA by 2012, quickest developing LNG plant on the planet Total Investment - $11.4bn; Project has conveyed over $3.6bn in income to date 22MTPA LNG, 3.5 MTPA NGLs T1-5 on creation; T6 FID 07/04; Over 500 cargoes conveyed OKLNG venture will support Nigeria LNG limit by 22MTPA from 2011 22 million tons/year LNG Project ; 4 LNG trains of 5.5 million tons/yr Trains 1 & 2 deliver 100kb/d NGLs Launch Project – trains 1 & 2 ; trains 3 & 4 to be included from that point FEED Commenced Feb 2006 BRASS LNG Project supports – NNPC, NAOC, ConocoPhillips Two LNG trains of 5MTPA limit every All understandings including shareholders' assention have been finished up FEED for the plant and offices nearing fulfillment FID focused for December 2007

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THE GROWTH AGENDA Major Export Projects – Other Pipeline Projects WAGP 630 km pipeline to convey gas to Benin, Ghana and Togo by Q1 2007 Initial limit is 200 mmscf/d however will develop to 580 mmscf/d Position Nigeria to successfully catch the developing markets of West Africa Construction started in 2005, authorized April 2007 Other Regional Gas Pipeline Projects 2 Key Projects Equatorial Guinea Gas Supply Trans-Sahara Gas Pipeline About 650mmscf/d to Equatorial Guinea and 2bcf/d thro the TSGP Strengthen provincial participation and monetary soundness Anchors Nigeria as local supply center point

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UPSTREAM PERFORMANCE 1999-2007 Crude Oil Capacity Growth – Funding Capacity Additions NB:- 2006 speculation incorporates IPP The unrefined petroleum limit development has converted into significant venture inflow in the business. For example in the vicinity of 2000 and 2006, FGN subsidizing levels dramatically increased from about $2.5bn to over $6bn.

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THE GROWTH AGENDA Industry Investment Levels Over $60bn is anticipa

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