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Considering ongoing reforms in the nation’s oil and gas sector in the last two years, the Federal Government has revealed that the sector is now ready to attract on a yearly basis, a whooping $10 billion investment.
The Minister of State, Petroleum Resources, Dr Ibe Kachikwu who stated this at the ongoing Nigeria Oil and Gas conference in Abuja while presenting his paper titled: ‘Reforming and Repositioning the oil and Gas Industry in Nigeria,’ added that the inflow will further bridge infrastructure gap.
Apart from this, government noted that the expected inflow will also address the challenges currently facing the entire oil and gas industry covering pipelines, refineries, gas and power, facility refurbishments and upstream financing. He added that the objective is to bridge the infrastructure funding gaps in the sector.
According to him, “Time has come to bring down the cost of crude oil production and put the right incentives in place. Currently, we have cost and technological issues. Between 2015 and 2016, we took drastic measures on how to moderate prices while from July 2016, there have been lots of stability in the downstream economy. There are still some challenges but there is work in progress.”
Highlighting the problems in the upstream sector which in his views, include the $6billion Joint Venture (JV) funding debt and other litigations, cost of production per barrel, which is currently between $27 and $28, Kachukwu disclosed that government is already bringing it down to the barest minimum.
Explaining more, the minister added that $18 is the government’s target level, hinting that an agreement with the international oil companies (IOCs) in JV with the Nigerian National Petroleum Corporation (NNPC) to cut down the cash call debt to $5.1 billion is underway.