Photo: The Guardian Crude oil.
By Festus Okoromadu
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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