Transnational Corporation of Nigeria Plc (Transcorp) will start exploration work next year as it expects revenue from oil to bolster future profit.
This was disclosed by the Chief Executive Officer and President of the company, Adim Jibunoh, while addressing participants at the Transcorp’s investors’ conference held in Lagos yesterday.
He said the company plans to convert its oil prospecting licence (OPL) 281 ASSET (located in Delta State) to Oil Mining Lease (OML) for commercial production by second quarter of 2019.
“These assets have huge gas deposit more than the petrochemical. Gas constitutes about 90 percent of our cost. It’s an asset that adds value to our business. “We are looking up to those that will invest. We are looking up to partnership. Our gas expense in a month is N3 billion,” said Jibunoh.
The company says it will commence production on OPL 281 at a minimum of 4000 bpd by 2022 while it plans to participate in bid rounds with a view to acquiring 2 more assets.
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Transcorp plans to begin development of petrochemical and fertilizer plant. That same year, by 2027; the conglomerate giant intends to acquire gas plants, complete petrochemical plant to drive generation of $5 Billion in revenues.
On his part, an executive director of the company, Christopher Ezeafulukwe, expressed optimism that oil and gas business will add value to shareholders’ wealth despite the unpredictability and vagaries of oil price in recent times.
Oil price fell precipitously to $26 in mid-2014 from a high of $110 due to a supply glut caused by the activities of the shale companies in the United States.
However, the decision of OPEC members led by Saudi Arabia and Russia to embark on aggressive output cut in November 2016 paid off as there was an uptick in oil price to $71 per barrel.
Analysts expect the price of oil to further increase in 2019 as the shale companies are experiencing stock outs as they are finding it difficult to meet global demand.
Also, China, the largest importer of U.S crude, could impose sanctions on importation the commodity in retaliation to huge tariffs impose on it by the largest economy in the world.
The above scenario could result in increased demand for Nigeria’s crude.
Trancorp Plc’s business segments are contributing to Group profit amid a tough and unpredictably environment as its performances were impressive in the second quarter.
For the first six months through June 2018, Transcorp recorded sales of N54.08 billion, which is double N21.21 billion recorded in 2014.
The steady growth in sales was largely driven by income from energy sent out in the last 3 years as the firm’s investment in the power plant has yielded fruit.
Revenue from energy sent out hits N29.79 billion in June 2018 from N11.11 billion recorded in 2016.
