Delta state’s $42bn investment in UTM FLNG: Wise decision

The investment and acquisition of 8%stake in UTM Floating Liquefied Natural Gas plant by the Delta State government is adjudged as best and wise decision ever taken.

This is so, because Delta State government will continue earn extra revenue from the investment in UTM FLNG, which will further boost or solidify the financial base of the State.

At it stands, the money or resources that comes from Federal Allocations and Internally Generated Revenue appears not sufficient enough for Delta State government to run the State.

The long-term investment in UTM FLNG will bring in sufficient money that will help the government embark on more rapid development across the state.

It is a right and timely decision taken by the Delta State government by grabbing and utilizing that life-time opportunity to invest in UTM FLNG.

Recall that the Delta State government missed similar investment opportunity to acquire stake from the 45% shares of Shell Petroleum Development Company SPDC, when the multi-national oil company divested some onshore assets in Delta State.

This happened sometime in the mid 2012. The international oil company, SPDC and Joint Venture partners announced plan to move away from land operations and sold entire 45% stake in OMLs 30, 34, 26, 40, and 42, all located in Delta State.

Imagine, if the Delta State Government in 2012, had acquired a minimum of 5% shares/stake in OMLs 30, 34, 26, 40, and 42. By now, the Delta State government would have been drawing or earning more resources from the investment in those crude oil assets.

Unfortunately, that investment opportunity was lost because the Delta State government never contemplated or reasoned in that direction.

This is why kudos must be given to Delta State government and former Governor Ifeanyi Okowa for acquiring 8% stake in the UTM FLNG.

Such investment in UTM FLNG is for the benefit of Delta and will be generating extra resources for the state in the long run.

Though, UTM FLNG operational base is in OML104, Akwa Ibom State, the Headquarters is in Warri, Delta State, that will create employment opportunities for Delta youths and women.

It is an ideal decision that the UTM FLNG is sited in OML104, a field that has 2.2 trillion cubic feet of proven gas reserves.

Interestingly, it is expected that UTM FLNG will start production in 2029 and will produce 2.8 million tonnes of liquefied natural gas (LNG) annually for export. This is huge and Delta State government investment will yield accruable dividends.

Commendably, the 8% stake of Delta State government in UTM FLNG, is safe because the Group Managing Director, Mr. Julius Rone (OFR), is from Delta State.

Contrary to wrong insinuation that the UTM FLNG will not be achieved, it is also worthy to know that the Nigerian Federal Government through the Nigerian National Petroleum Company Limited NNPCL, has 20% stake, which is why the project will succeed.

The incumbent Governor of Delta State, His Excellency, Sheriff Oborevwori deserved commendation for supporting the State investment in UTM FLNG.

The people of Delta State must put away sentiment and look at the significance and future benefits of having an investment of 8% stake in UTM FLNG.

Also Delta State Government Investment is over 200BN based on the current UTM FLNG Project Valuation based on PWC Investment report on the Project.

Findings have revealed that other investors are buying into the UTM FLNG project because of the viability of the project.

It is worthy to note that Delta State investment is over 450% as at today.
Interestingly, the UTM Offshore Limited is the first indigenous private company in Nigeria, to build such a magnificent Floating Liquefied Natural Gas plant in the country.

In conclusion, the Delta State government should also exploit more investment opportunities that will be of great future benefits to the state.

Kudos to the Group Managing Director, Mr. Julius Rone (OFR), UTM Offshore Limited, for that wonderful vision on building UTM FLNG Plant and also thanking former Governor Ifeanyi Okowa for saving for the future of Delta State and it’s citizens by acquiring 8% stake in UTM FLNG.