The federal government hinted yesterday that it is putting necessary measures in place to stop multinational oil firms from shipping out all the crude oil they produce in Nigeria.
It also stated that it would compel Shell Petroleum Development Company, Exxon Mobil, Chevron and other multinational firms operating in Nigeria’s upstream sector to build refineries for local production in the country.
The minister of state for Petroleum Resources, Dr Ibe Kachikwu, disclosed this at a breakout session of the maiden Nigeria International Petroleum Summit (NIPS) titled, “Deepening collaboration in the African oil and gas industry – challenges and opportunities for investment” in Abuja.
According to him, the government is planning to put frameworks in place for the multinational oil and gas firms to build refineries in Nigeria, thereby processing a substantial amount of crude that is produced from its oil fields.
He said, “We would get to a point where Nigeria, definitely, would be a major supplier of refined petroleum products. It just has to happen. Nothing else makes sense.
“We are also saying directly to oil companies that a time would also come when we would not be open to see them move around all the crude oil they produce in Nigeria.
“We will like to see integrated refining and integrated processing here. It gives us more jobs and creates more investments”.
He said currently, the nation has an average in-country refining capacity of 14 per cent, adding however that this would be upgraded to between 90-95 per cent in 10 months to meet rising demands.
Kachikwu said henceforth oil has to provide the resources to power the country, provide jobs for Nigerians and provide the operational environment transparent enough for others to take Nigeria seriously.
The session had in attendance the United States Ambassador to Nigeria, Mr Stuart Symington; Minister of Petroleum of Chad, Mr Bechir Madet; and the Secretary General of the International Energy Forum (IEF), Dr Sun Xiansheng, among others.
Kachikwu also revealed that the upstream sector of the country’s oil and gas industry will attract over $40 billion investment in the next five years due to the application of a new funding strategy it has deployed.
Attributing the development to government’s reinvention of its policies, the minister noted that the exit of the country’s oil company, the Nigerian Petroleum Corporation (NNPC) from the Joint Venture Cash Call (JVC) agreement with some international oil companies paved the way for the investments.
He stated: “We have been able to, through a lot of struggle, change the funding capacity for the upstream, and that had sort of energised investors in the upstream sector. Now we are beginning to see projects like Egina, $15 billion; Zabazaba, potential $10 billion; Bonga, potential $10 billion, and the likes.
It will be recalled that the government in December 2016 upon signing the exit agreement said a new funding model would be adopted that will not only attract new investment into the sector but will enable government to receive royalties, taxes and profit from its equity share of Joint Venture oil and gas production.
Kachikwu tasked stakeholders in the Nigerian oil and gas sector to take the challenges posed by the recent downturn in the price of crude oil in the global market as an avenue to change their operational mode, stressing that the commodity remain the vehicle that will be use to transform the country’s economy.
According to Kachikwu the summit was put in place to harness innovative ideas that will ensure that crude oil facilitate the economic growth of the country.
His words: “Oil has got to provide the resources to power this country; jobs for our people; and the operational environment that is transparent enough for others to take Nigeria seriously.
“Oil has got to provide the technical and advanced skills sets that are essential for us to export people out in to other African countries, and to become investors in other African countries. Something the banking sector has tried to do successfully over the last six to seven years”.
To excel in the face of the challenges the slump in the price of crude oil, Kachikwu tasked operators in the industry to apply innovative strategies that will lead to reduction in cost of production to stay in business.
He added: “If you cannot produce cheap cost oil, if you cannot diversify the processing of your oil; if you cannot look to internalising and externalising investment in the sector; if you cannot capture the requisite technological skills that are essential to help you operate efficiently, you are lost before you start.”
“I ask everybody to look at the challenges that we face, he said, noting that, “Africa is probably the continent with the least supply of power.
Declaring the summit open, President Muhammadu Buhari represented by the secretary to the federal government (SGF) Boss Mustapha, said the summit is designed to be Africa’s largest and most important platform and linkage to the world where technological breakthroughs will be unveiled.
He said, “NIPS is designed after the OTC in Houston and part of the objective is to deepen, enrich and provide leadership for Africa and make it one of the most important annual oil and gas events globally.
“This summit will afford Nigeria a unique opportunity to showcase to the international community policy direction and effort of government in the petroleum sector especially the new oil and gas exploration and markets, new measures to sanitize the sector, the expansion of investment opportunities to boost investors’ confidence, technological advancement, Nigerian content development, the institutionalization of reforms in the country’s oil and gas industry and the galvanization of Nigeria’s position as the leading oil producer in the continent of Africa”.
Delivering a goodwill message, the Group Managing Director of the NNPC, Dr. Maikanti Baru, called for closer collaboration among African nations but across all sectors to leapfrog the economies in the continent.
Dr Baru challenged the participants at the summit to come up with practicable solutions to effectively develop Africa’s hydrocarbon resources, saying that discussions and interests alike would stir up strategies and actionable items that would crystalize into a veritable roadmap for the energy future of the African continent.
In his goodwill message, the Secretary General of the organization of petroleum exporting countries, (OPEC) Dr. Sanusi Barkindo applauded President Buhari for the role he played in securing the adoption of the historic OPEC/None – OPEC declaration of cooperation.
Commending the president, he said, “On behalf of the entire OPEC family, I will like to express our deep appreciation for his open and cooperative stance. His willingness to use his good office, international respect and admiration to intervene at the heads of states level and his flexibility in reaching a consensus position behind closed doors”.
Nigeria, he said, is consistently regarded as one of the respected members of OPEC particularly in the realm of consensus building.
Speaking of adoption of innovative approach to curbing the global oil price fall Barkindo said, “OPEC has embarked on one of the most innovative enterprises ever known in the history of oil – the declaration of cooperation. This innovation was a response to an unprecedented market turbulence which had a devastating effect not only in the industry but in the economies of OPEC member countries.”
The summit, which is the first of its kind in Africa, has its theme as, “Leading Africa’s Response to Global Oil and Gas Challenges.”
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