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.