Nigeria in need of four more deepwater projects to soar daily output—Minister
…Denies any running pipeline protection deal with militants
Several youths and even traditional rulers in Niger Delta were on Wednesday in Asaba, the Delta State capital, shocked to their marrows when the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, made it clear to then the validity of pipelines protection deals with community youths and mainly repentant militants has expired.
He said government is not in that business any longer.
Beyond the issue of pipelines protection, the minister in another forum noted that the country is in dire need of about three or four deepwater projects with capacity to add 750,000 barrels to one million barrels to Nigeria’s daily production.
However, he was quick to note that the investments are in need funding.
His presentations were captured in the latest edition of Organisation of the Petroleum Exporting Countries (OPEC) Bulletin, where he noted that about 250,000 barrels deep-water project are potentially ready to come on stream sometime late next year.
According to him, “One of the things the government undertook, which has been very helpful, is a cash call policy to deal with debts. We signed agreements on how to pay off existing backlogs, and this brought back confidence. We have a new model on how to deal with the cost of oil.”
In his further submission, Kachukwu averred that the ideas have helped boost funding, stressing that “On the back of this certainty, we need to go back to look at costs. We have one of the highest production costs among OPEC countries, and we need to work on that.”
Before now, it would be recalled that President Mohammadu Buhari had said the petroleum industry remained critical to the Nigerian economy when he argued that “The golden era of high oil prices may not be here now, but oil and gas resources still remain the most immediate and practical keys out of our present economic crisis”.
Apart from looking at more investments upstream, the minister alluded to the fact that even the downstream remains another key sub sector in serious need of investment attention, in which a ministerial directive had been issued to have all refineries up and running by 2019.
He said “Many teams have been set up to deal with the issue, and there is a lot of financing interest. I hope that by the end of December, we will attain the financing we need. But infrastructure is a major gap in the oil industry in Nigeria, so we need to think outside of the box.”
To the minister, the plants’ life is about 40 years, “and the refineries are in dire need of replacement, but there is no money in reserve for that. Price models from the private sector are the only alternative.
“We have to tariff them or concession them and be able to move forward. We need to do that like yesterday. As to changes in the country’s policy structure, the all-embracing petroleum policy is moving ahead, and all indications are that a rudimentary Petroleum Industry Bill (PIB) should be passed by the end of the year.”
“The first two deadlines are complete, and once we do that, we will capture the A–Z of all the policies we need. Now we need to move from policies to directives, and regulation of these policies. We work so often with the National Assembly to finalise work on the PIB,” he said, adding the whole house is working on the PIB. This will show the business models we are going to embrace, and how we will deal with environmental issues,” Kachukwu explained in the Bulletin.