Investment

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

Published

7 years ago

February 20, 2018

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.”

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Investment

Deji Adeleke Boasts of Generating 15% of Nigeria’s Electricity, to Unveil $2bn Worth of Power Plant Next Year

Published

7 days ago

October 16, 2024

Ugwoke Ogbodo

A billionaire businessman and father of popular music star David Adeleke, also known as Davido, Dr. Adedeji Adeleke has disclosed that he has a firm that generates about 15 per cent of Nigeria’s electricity.

He disclosed this while speaking at the Seventh-Day Adventist Church’s General Conference Annual Council 2024.

Adeleke revealed that he is in the process of constructing a 1,250-megawatt power plant worth $2billion, saying that upon completion, is expected to be the largest in the country and that it would be operational in January, 2025.

He said as a businessman in electricity, he owns power plants and generate presently about 15 percent of the electricity needs of Nigeria.

The elder brother of the Osun State Governor, Ademola Adeleke, said he has Chinese engineering companies that work for him, adding that his tenth new power plant will be the biggest thermal power plant in the country.

Adeleke disclosed that while preparations for the project were underway, an unnamed government official threatened to prevent its completion.

Despite this challenge, Adeleke credited the near-completion of the project to the mercies of God, stating that it is a testament to divine intervention that the venture has progressed this far.

Adeleke noted that his Chinese friend had to travel down to Nigeria to discuss a way out because he never believed that prayer was enough to get the project done.

He affirmed that prayer did as the then Minister of Power granted the approval because he saw that the project was a brilliant one.

Investment

British International Investment and Ecobank Sierra Leone Sign $25 Million Risk Sharing Agreement to Boost Private Sector Growth

Published

2 weeks ago

October 7, 2024

Samed Olukoya

British International Investment (BII), the UK’s development finance institution and impact investor, today announced a $25 million risk sharing facility with Ecobank Sierra Leone to boost private sector growth in high-impact sectors of the economy.

The risk sharing facility, which includes a comprehensive technical assistance programme, will support Ecobank to increase lending to ambitious businesses in a frontier market where economic growth is hampered by lack of capital and investment.

The private sector is crucial to Sierra Leone’s economy and mainly comprises small and medium-sized enterprises (SMEs) who provide employment for about 70 per cent of the population. However, they struggle to gain access to capital due to various factors including limited availability of suitable financial products, high collateral requirements, high interest rates and the prevalence of short-term loans.

The new facility will support local currency lending, demonstrating BII’s ability to act as the first mover in frontier markets and drive impact through pioneering risk navigation strategies. The investment will help Ecobank Sierra Leone to grow its loan book by increasing credit limits and extend lending tenors to up to five years, which are not otherwise available in the market. This is expected to boost business growth, create more jobs and increase private sector contribution to Sierra Leone’s economy.

The transaction marks a significant milestone as the first investment under the Africa Resilience Investment Accelerator (ARIA), which is a collaborative initiative launched by BII and co-funded with FMO, the Dutch entrepreneurial development bank, to boost investment in frontier markets such as Sierra Leone.

The Sierra Leone economy faces challenges including a depreciating currency driven by high inflation, a large trade deficit due to over-reliance on imports, and insufficient investment in infrastructure and services. BII’s investment aims to spur economic growth and development by targeting critical sectors including renewable energy, agriculture, agro-processing, infrastructure and manufacturing.

The announcement builds on a $50 million trade finance facility between BII and Ecobank in 2021, which helped the bank to deepen its reach across Africa and support supply chains in frontier markets such as Burkina Faso, Chad and Togo.

UK Minister for Development, Anneliese Dodds said: “I am delighted to see BII announce this new risk sharing facility with Ecobank Sierra Leone. This agreement will support local currency lending, bringing much-needed capital into sectors with a high development impact, thereby contributing to job creation and economic growth. This is yet another example of BII innovating to address risks and enable development in frontier markets.”

Samir Abhyankar, MD and Head of Financial Services, BII, commented: “The signing of this agreement with Ecobank Sierra Leone underscores BII’s pioneering role to lead investments in countries that are often overlooked by investors. The facility will be a game-changer for Sierra Leone, providing much-needed capital for ambitious local businesses to accelerate their growth, spur job creation and deepen impact. It’s an example of BII innovating and working with partners to help address pressing challenges where it matters the most.”

Sebastian Ashong-Katai, Managing Director, Ecobank Sierra Leone, said: “We are delighted to have secured the support of British International Investment in boosting Ecobank’s vital lending capacity for Sierra Leone businesses who are the engine room for our country’s growth, economic development and employment. This further strengthens our intent to be the bank of choice for Sierra Leone’s businesses and leverages our delivery of world class products, services, solutions, borderless digital pan-African platform and business skills training which are designed to support them in further growing their businesses.”

Alex Kucharski, BII’s Head of West Africa for ARIA, added: “ARIA aims to unlock investment in Sierra Leone, a market full of potential. We are delighted to have enabled the investment by British International Investment into Ecobank Sierra Leone, which will bring much needed growth capital to underserved businesses in the country, showing that more investment is possible.”

Investment

Nigeria Targets $10 Billion in Deep-Water Gas Investments with New Tax Incentives

Published

3 weeks ago

October 4, 2024

Samed Olukoya

The Federal Government has perfected plans to attract $10 billion in new investments in deep-water gas exploration through tax breaks and other incentives.

In the new policy framework forwarded to the National Assembly to be passed into law, the Federal Executive Council (FEC) said about 67% of Nigeria’s offshore gas sector remains undeveloped.

However, the FEC believes that by providing tax credits for new investments in the sector, more global players can be lured to the untapped sector.

In a statement published by Olu Verheijen, special adviser to the president, the government also plans a gas-production allowance for greenfield developments in onshore and shallow-water locations.

“We intend to unlock between $5 billion to $10 billion of new investments in Nigeria in the near- to medium-term,” Verheijen said.

According to Verheijen, who also heads the Energy Office of the Presidency, once this is passed into, it would fast-track the development of natural gas, deepen gas usage for transportation and bolster energy security.

It was estimated that global businesses will be spending about $90 billion on deep-water oil and gas projects in coming years, this, Verheijen said is what the country is targeting.

“This is the pool of funds that our reforms are targeting,” she said.

The president has implemented a series of reforms to rejig the nation’s economy and set Nigeria on the right path. In a recent broadcast, the president claimed these reforms have attracted over $30 billion in foreign direct investment.

Despite the changes made to core policies, Nigerians are yet to see its results as earnings remained low and inflation rate remained at an all-time high while economic uncertainties in the face of chronic Naira depreciation have eroded the profitability of businesses.