- Says Oil Remains Nigeria’s Economic Growth Driver
By Nse Anthony-Uko
The federal government on Monday 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.
The minister of state for petroleum resources, Dr. Ibe Kachikwu made the disclosure at the on-going Nigeria Petroleum Industry Summit (NIPS) holding in Abuja.
Attributing the development to government’s reinvention of its policies, 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.
“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.
“So many other investments put at over $40 billion potential investments over the next five years, if we do the right thing, set the right models and set the right policies,” he said.
He added that, “This is very key and that is coming from a country where investments had runaway for nearly seven to 10 years.
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.
“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 serious.
“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’, he stated.
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.
“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. Adding that, “Africa is probably the continent with the least supply of power.
“And until power is available, this country, this continent cannot move. Nigeria, obviously, with its 180 million people and growing at a very rapid rate, is critically in need of power.
“That power won’t come unless gas projects are incentivised and happen, and happen rapidly, he stated.
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.
“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,” he stated.
“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,” Boss stated.
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.
“Our expectation is that at the end of this summit a communique will be issued out as action points for current and potential African oil and gas countries for better collaboration and development,” Dr. Baru stated.
Dr. Baru pledged the support of the NNPC to nurture the summit into a full-fledged international summit like the Offshore Technology Conference (OTC) held in Houston, USA and Abu Dhabi International Petroleum Exhibition and Conference held annually in Abu Dhabi, UAE.
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 President Buhari, 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.