Although the Nigerian Petroleum Development Company (NPDC) is a fully owned subsidiary of the Nigerian National Petroleum Corporation (NNPC), we included the company in this list of emerging Nigerian independents based on its huge potential as a result of its activities in the Nigerian E & P space as well as the growth envisioned for the company over the next few years. Its vision is to be Nigeria’s premier exploration and production company, profitably operating a global petroleum exploration and production business using current technology and allowing it to compete with highly successful global oil companies like PETROBRAS.
The company was established in 1988, to enable the NNPC meet its objective of being a major player in the upstream sector of the Nigerian oil and gas industry but NPDC could not however fully realise this objective mainly as a result of a lack of cooperation from past administrations, some of which actually stripped NPDC of some of its very prolific acreages. As a result, growth was particularly slow until the current Minister of Petroleum, Mrs. Diezani Alison-Madueke, decided to take advantage of an existing clause in the NNPC/Shell/Elf/Agip Joint Operating Agreement (JOA). With this, the Company emerged operator in line with the JOA, which binds parties in the Shell JV. This development along with the support of the President Goodluck Jonathan administration meant the NPDC began to find its feet as an independent producer. As such, the trend of asset stripping that was standard under previous administrations was stopped and assets were instead handed over to it.
In 2010, the Minister of Petroleum Resources gave the NPDC with a production of about 65,000 bpd, a target output of 250,000 bpd, by 2015. Currently the production output level is in the region of 130,000bpd representing a 100% growth in production. This has been largely due to the bulk of OMLs handed over to the NPDC upon the divestment of some of the Joint Venture partners of its parent company, NNPC. These include OMLs 26, 30, 34 and 42. The Minister of Petroleum continually stressed that to sustain that tempo of production growth and to meet the 2015 target; the company needed to explore further afield and commence an aggressive drilling programme.
NPDC achievements in line with meeting this target include the successful drilling of two new wells, Okono 6 and 7 in OML 119. The wells have yielded in the region of about 12,000 bpd. Still the company plans to drill more wells this year, and intends to deploy two more rigs in addition to the two currently on site, with long term goal of drilling 40 wells over the next five years. The company has also adopted the strategy of engaging in well repairs and maintenance activities aimed at boosting reserves to ensure sustainability. The company carried out repairs on some of its wells in OML 26 in 2012. This helped to double production from those wells, which added up to the company’s current 130.000 daily production. Furthermore, NPDC is breaking new grounds in gas production; it commenced gas production from its Oredo gas plant since November 2012 and currently produces 65mm scf per day.
The company has however courted some controversy recently over its entry into a strategic alliance agreement with Atlantic Energy Drilling Concepts. A recent petition by a group known as Restoration Niger Delta alleged that an untoward transfer of 60 per cent of the 55 per cent equity holding in the form of production rights of NPDC in OMLs 26, 30, 34 and 42 was made to Atlantic Energy Drilling Concepts. NPDC has however dismissed the allegations by stating that the agreement between the two parties was neither a divestment of asset nor transfer of operatorship but simply an alternative funding arrangement in order to meet the NPDC’s cash call obligations in OMLs 26, 30, 34 and 42 in question.