NNPC, MPN Consider Alternative Funding
Nigerian National Petroleum Corporation(NNPC) and its Joint Venture partner, Mobil Producing Nigeria Limited (MPN)
are considering going into the bond market as an alternative source of funding by the year 2016. This was disclosed by the NNPC’s Group Executive Director, Finance and Account, Mr Bennard Otti at the opening ceremony of a 3-day workshop titled: “NNPC/MPN JV Project Bond Workshop” held in Abuja. In his opening remarks, the GED stated that: “NNPC is meeting with her JV partner to brainstorm on alternative sources of funding such as bond market in order to enhance the revenue and also create employment opportunities”.
According to him, the workshop is for capacity building in line with the vision of the Honorable Minister of Petroleum Resources, Mrs. Diezani Alison Madueke and the Group Managing Director of the NNPC, Engr. Andrew Yakubu on the need to take decisive actions to achieve goals for the economic growth and development of our country.
He implored the participants to discuss meaningful suggestions on how the bond instrument could be a better funding alternative in view of the challenges facing both the local and worldwide industries.
Speaking at the event, MPN’s Upstream Controller and Chief Financial Officer, Mr. Segun Banwo noted that since 2004, funding from the Federal Government has not been sufficient making it necessary for NNPC/MPN joint venture to seek for alternative source of funding in order to bridge the gap.
“The challenge of today is that a lot of people are going into the bank market and the avenue is being crowded making it difficult for us to obtain sufficient funding,” he said.
He said that going forward, it is necessary to look for alternative sources of funding in view of the challenges in the bank market adding that by the year 2016, the NNPC/MPN Joint Venture will go into the bond market for funding.
“The bond market we are looking at is presently at the elementary stage to understand what it is, the processes involved and how it works. From the years 2013 to 2015, we will continue to use the external financing option but by the year 2016 we would switch to the bond market as an alternative source of funding,” Mr Banwo said.
The bond market is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the Secondary market, usually in the form of bonds. The primary goal of the bond market is to provide a mechanism for long term funding of public and private expenditures.
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