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FG to Attract $10bn Oil and Gas Investments – Kachikwu

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  • FG to Attract $10bn Oil and Gas Investments

The Minister of State, Petroleum Resources, Dr Emmanuel Kachikwu, has said that the Federal Government will attract more than $10bn investments to the oil and gas industry in the next five years.

Kachikwu said this on Tuesday in Abuja at the ongoing Nigerian Oil and Gas Conference tagged: “ Reforming and Repositioning the Oil and Gas Industry in Nigeria’’.

He said that the investments would address challenges facing the oil and gas industry, covering pipelines, refineries, gas and power, facility refurbishment and upstream financing.

The minister of state said that the objective was to bridge the infrastructure funding gaps in the Nigerian oil and gas sector.

He said, “Time has come to bring down the cost of crude oil production and have the right incentives.

“Three years ago, we have cost issues, technological issues but not issues of where the money would come from because of crude price regime.

“Between 2015to 2016, we took drastic measures on how to moderate prices, while between July 2016 and now, there have been lots of stability in the downstream economy.

“There are still some challenges but work is in progress.”

Kachikwu said that the major problem in upstream was $6bn Joint Venture (JV) funding debt and other litigations.

He said that an outstanding debt of $5.1bn would be paid over five years through incremental oil production volumes.

According to him, we now have new cash call model that would free government resources and help production stability.

He said, “There are still some governance issues to be addressed but once this is resolved, there is expected to be an improvement in oil production.

“We are left with options of bringing in investors that will help address the over $45bn infrastructure deficit.

“Government wants to be bold enough to take steps that have not been taken before. We have to release our assets to private investors.

“Either gas pipeline, crude pipeline, the time has come to move from government ownership to private ownership for efficiency.”

Kachikwu said that effort is ongoing in addressing the challenges in the Niger Delta region to boost oil production.

He said that government planned to grow oil production to three million barrels per day.

The minister of state said that government had commenced serious engagement with all stakeholders to achieve stability in the Niger Delta region.

He said talked about the Niger Delta crisis and reduced investments by oil firms.

Kachikwu said the cost of production was key and the issue of militancy was also key.

He said, “We have set a target of zero militancy for 2017 and it is achievable due to lots of community-based activities and motivation,’’ the mister of state said.

He said that the acting President had visited three states and was planning to visit Akwa Ibom State soon.

Kachikwu said that the oil sector could not wait for the political sector to find political solutions to issues.

He said, “We have to collaborate with the oil companies, state governments and see how we can capture some benefits that will come from this.

“We have been seeing engagement of youths and we expect more improvement day by day.

“The states must make their mini-economy agenda and they will work with security agencies.”

In his remark, the Secretary-General of the Organisation of Petroleum Exporting Countries, Dr Mohammed Barkindo, commended Nigeria for exiting the Joint Venture Cash Call debt.

Barkindo said that the cash calls “are the counterpart funding which the Federal Government, represented by the Nigerian National Petroleum Corporation, annually pays as its 60 per cent equity shareholding in various oil and gas fields’’.

It is operated by international oil companies in the country for more than four decades and indigenous oil firms and Nigeria owe arrears of $6.8bn.

Barkindo commended Kachikwu for securing the feat on behalf of the government.

He said, “I must single out the frontal approach on the lingering issue of funding our exploration as well as production, the JVC.

“Many of my colleagues, here that we served together, will testify that government after government, regime after regime, we have battled with this issue continuously without solution.

“This is a confession: the day you overcome this issue that had beleaguered this industry as well as government, you made my day.

‘’Same for the day of all participants who knew what the government had battled to stay afloat on the issue of cash-call.

“The approach has been innovative, the solution is very practical.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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