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We’re Expecting $40bn Oil Investments in Five Years – Kachikwu

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  • We’re Expecting $40bn Oil Investments in Five Years – Kachikwu

Nigeria would be expecting about $40bn worth of oil investments in the next five years, the Minister of State for Petroleum Resources, Ibe Kachikwu, announced on Monday.

He also stated that the country’s refineries were currently producing at 14 per cent capacity, stressing that oil firms operating in the nation would not be allowed to ship out all the crude they produce without refining some locally in the near future.

Kachikwu, who spoke at the ongoing Nigerian International Petroleum Summit, further stated that the funding capacity for the upstream oil sector had been changed in the past two years.

The minister said, “There are major plans; everywhere you look, there are opportunities in the oil sector. What have we achieved since the launch of the 7Big Wins two years ago? 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, worth $15bn; Zabazaba, $10bn; Bonga, $10bn, and the likes. So many other investments, put at over $40bn potential investments over the next five years if we do the right thing, set the right models and set the right policies. That is very key and that is coming from a country where investments had run away for nearly seven to 10 years.”

On refineries, he stated that the government would announce a model for target investments in the facilities within the next one month.

Kachikwu said, “We have addressed refineries; for the first time, we are creating a model where target investments are going into the dilapidated refineries. Some of them will be announced over the next one month. We are still targeting to be able to get these refineries up and running from about 14 per cent utilisation capacity today, to about 90 to 95 per cent over the next 18 to 20 months.

“If we do that, hopefully, we will begin to move drastically to self-sufficiency in the production of refined petroleum products.”

The minister told delegates at the gathering that multinational oil firms would not be allowed to export all the crude they produce in Nigeria, as emphasis would shift to local refining of substantial portion of the crude produce in the country.

He said, “We will get to a point where Nigeria, definitely, will be a major supplier of refined petroleum products. It has to happen. We are also saying directly to oil companies that a time will also come when we will 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.”

Kachikwu, however, declared that Nigeria and other oil producers must strive to produce cheap oil in order to avoid losing out in the sector globally.

“The reality is that today, if you cannot produce cheap cost oil, if you cannot diversify the processing of your oil, if you cannot look to internalising and externalising investments 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,” the minister stated.

In his address, the Secretary-General, Organisation of Petroleum Exporting Countries, Mohammad Barkindo, announced that member of the cartel conformed to the agreement reached by them with respect to crude production quotas by 133 per cent in January this year.

“Many didn’t think it would get off the ground, however, we have registered conformity in 2017 of 107 per cent across all the participating countries and I will like to use this platform to also announce our January figures of 133 per cent that will be released in a couple of hours in the OPEC secretariat,” he stated.

President Muhammadu Buhari, who was represented at the summit by the Secretary to the Government of the Federation, Boss Mustapha, told the international guests that Nigeria would strive to achieve its target of seven per cent Gross Domestic Product growth rate in the next three years.

He said, “I wish to place on record that since the launch of the Petroleum Industry Road Map and ERGP (Economic Recovery and Growth Plan), we have recorded numerous successes, especially in getting Nigeria out of recession and sustained increase in our foreign reserves.

“We will continue to strive to achieve our target of seven per cent Gross Domestic Product growth rate within the next three years and rest assured that previous efforts will be sustained. Our effort in stakeholder engagement and stabilising the Niger Delta will continue to receive due attention to ensure a sustainable level of production.”

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

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Economy

Vice President, Yemi Osinbajo Seeks Collaboration With Vietnam on Agriculture and Technology

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Nigeria’s Vice President, Prof Yemi Osinbajo has sought collaboration with Vietnam in the areas of agriculture and technology. The vice president spoke in Vietnam at a bilateral meeting on Monday. 

During the meeting with his Vietnamese counterpart, Võ Thị Ánh Xuân, Osinbajo acknowledged both countries’ market potentials in the digital economy, telecommunications, and agriculture. 

Speaking at the Presidential Palace in Hanoi, Vice President Yemi Osinbajo noted that telecommunication penetration in Nigeria is one of the deepest in any developing country, stating that about 120 million Nigerians now use one telecom service or the other.

Calling for collaboration on digital economy, Osinbajo said “We have close to 120 million of our citizens who have put to use telecom equipment or devices. And also, broadband connectivity is vastly improved. We hope that by 2025, we will have broadband connectivity for all of our over 200 million people”. 

On the call for collaboration in the area of agriculture, the vice president noted that cashew production is an important area in which both counties can partner. 

He said ” Given the food crisis that the world faces today, and is likely to continue facing even in the coming years, I like to say that the way forward is for our countries to collaborate. For instance, establishing cashew processing plants in Nigeria”. 

Investors King understands that Vietnam is the world’s second-largest cashew processor with an annual processing capacity of 1.2 million tons representing up to 40 percent of the world’s total capacity. 

Speaking at the event, the Vietnamese Vice President commended Nigeria’s leadership role in the ECOWAS sub-region and Africa generally, especially in the peaceful resolution of disputes. 

She also commended Nigeria’s handling of the Covid 19 pandemic while reposing confidence in Nigeria’s ability to resolve challenges confronting the African continent and the West African region in particular. 

Conclusively, she added that her country would continue to work with Africa to meet its aspirations in agriculture, clean energy and digital penetration.

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Economy

Togo, Benin, and Niger Republic Owe Nigeria N4.1 Trillion in Electricity Debts

Nigeria currently supplies electricity to the Republic of Benin, Togo, and Niger through the Nigeria Bulk Electricity Trading, NBET Plc

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Electricity - Investors King

The House of Representatives on Public Account has disclosed that Nigeria’s neighbouring countries, Togo, Benin, and Niger Republic owe the country about N4.1 trillion in electricity bills.

The revelation was contained in a letter sent by the committee to the Managing Director of Nigeria Bulk Electricity Trading, NBET Plc, Dr. Nnaemeka Eweluka.

According to the letter which was signed by the Chairman of the Committee, Hon. Oluwole Oke, the Managing Director of NBET is expected to appear alongside Dr. Marilyn Amobi, who served as MD/CEO from 2016 to 2020. 

The house committee has accused the former MD, Amobi of non-rendition of the Audited Accounts for the years 2014, 2015, 2016, 2017, 2018, and 2019.

Investors King understands that Nigeria currently supplies electricity to the Republic of Benin, Togo, and Niger through the Nigeria Bulk Electricity Trading, NBET Plc. About 6 percent of the electricity generated in the country is sold to the neighboring countries. 

Meanwhile, according to the managing director of NBET, the federal government is working on structures that will enhance power distribution in the country, stating that most of the power-generating companies are currently located in the southern part of the country. 

“Most of the power generation companies are located within the south-south and south-west largely because of gas with one in the south-east, of course, we have the hydros in Niger state,” he said.

The MD added that Nigeria could generate up to a capacity of about 14,000 megawatts. He however noted that the distribution capacity is only between 4,000 to 5,000 megawatts per day.

Eweluka nonetheless sounded a note of hope, making references to the intervention projects that are currently ongoing such as the partnership with Simens.

“To address this gap between what is available and what the system can currently carry; there are a number of intervention projects that the government is currently pursuing, that include the presidential power initiatives in partnership with Siemens,” he concluded.

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Economy

No Plan to Increase Fuel Price; Says FG

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The Federal Government has stated that it has no plan to increase fuel price during the yuletide period.

This assurance is coming amid the nationwide fuel scarcity which has pushed the price of petrol above N250 in many retail stations.

Investors King learnt that fuel is being held for N250 per litre in Abuja and several other cities across the country while black marketers are charging between N400 and N450 per litre.

The scarcity and the high price of fuel are however becoming unbearable for many Nigerians, especially those who have reasons to embark on business travel for the December festivals.

According to the National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria (IPMAN), Chief Ukadike Chinedu, most of the association members, who owned the bulk of the filling stations across the country, were now subjected to purchasing PMS at about N220/litre, which was why many outlets currently dispensed at about N250/litre and above.

He noted that the cost of the commodity has been on the rise due to its unavailability and other concerns in the sector. 

He added that the price of fuel could be sold from N350/litre to N400/litre before the end of the year. 

Meanwhile, a number of senior officials at the NNPC had stated that the subsidy was becoming too burdensome on the national oil company, as this was another reason for the scarcity of PMS.

According to a source who is familiar with the development as reported by Punch News, “How can we continue to import 60 million litres of petrol daily and keep subsidising it, while millions of litres are either diverted or cannot be accounted for? The burden is too much, as you rightly captured in that story”. 

Investors King understands that NNPC is the sole importer of petroleum into the country and it pays billions of naira every month to subsidise the product to N147 per litre. 

Reuters News reported that in August 2022, NNPC paid more than $1 billion as fuel subsidy while the federal government earmarked N3.6 trillion as fuel subsidy in the 2023 budget proposal. 

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