•Says Nigeria’s survival still depends on
oil Industry
•Kachikwu predicts Nigeria’s JV review will
lead to oil investment boom
Tobi Soniyi and Chineme Okafor in Abuja
The federal government under the watch of
President Muhammadu Buhari plans a $10
billion infrastructure development fund for
the oil-rich but restive Niger Delta, the
Minister of State for Petroleum, Dr. Ibe
Kachikwu, said yesterday in Abuja.
“We are launching $10 billion
infrastructural rebirth investment
programmes in the Niger Delta region. This
is not money that is going to come strictly
from the federal government. It is going to
come from investors, individuals who are
ready to do private sector infrastructure,
obviously states and federal governments
as the case may be and international
organisations who have shown interest to
help,” he said at the unveiling of the
Roadmap for the Petroleum Industry
tagged “7 Big Wins to Grow Nigeria’s Oil
and Gas.”
Before Kachikwu’s revelation of the mouth-
watering goodies for the long suffering
region, Buhari had, while launching the
roadmap, said notwithstanding his
administration’s much talked about
diversification as the main tool for putting
the economy on the path of sustainable
growth, Nigeria would have to depend on
oil and gas revenue to get out of the
current economic recession, contending
that despite the fall in oil price, oil and gas
resources remained the most immediate
and practical keys out of the country’s
present economic crisis.
“As important as it is to ensure that
agriculture, solid minerals and other
critical sectors of the economy are
supported to grow and contribute more to
the nation’s economy, we still need a virile
and efficient oil and gas industry to take
care of our foreign exchange
requirements,” he said.
According to him, an efficient oil and gas
sector remains a national imperative and a
core thrust of his economic policy, adding
that the petroleum industry remained
critical to the Nigerian economy of today
and the future, despite current challenges.
The president also admitted that oil and
gas still remained a critical enabler for the
successful implementation of his budget as
well as the source of funds for laying a
strong foundation for a new and more
diversified economy.
The president said the task before the
Ministry of Petroleum Resources was to
maximise the potentials and opportunities
across the whole range of the oil and gas
industry to stimulate the economy in spite
of the current challenges.
He said: “There is also a dire need to instil
a new culture of transparency and
efficiency in the industry, streamline
operations along best practices by
championing and implementing strategic
reforms at every layer of the industry”.
“This will help us improve oil and gas
production, explore our frontier basins,
improve our local refining capacity and
above all build sustainable partnerships
with the oil producing communities.”
Buhari said that if Nigeria was able to plug
the leakages, and tighten loose systems
that characterised the industry in the days
of high oil prices, the country could do
more with the little that it is getting at the
moment than in the time of plenty.
The president noted that recent
developments in the Niger Delta had
temporarily limited the nation’s oil and gas
production and supplies.
He however reaffirmed that, “whatever
challenges we are currently facing in the
region, our resolve and capability to work
with all stakeholders to restore normalcy
will guarantee success.”
The president acknowledged the
importance of the public, the media, local
and foreign investors and other critical
stakeholders in the oil and gas industry and
appealed for their support and cooperation.
Buhari said creativity, innovation,
technology and robust partnership amongst
various stakeholders were required to get
the best from the industry.
He said: “This Roadmap reflects the vision
and aspiration of this administration for
this sector and urge you all to deliver on
the expectations contained in the
Petroleum Industry Roadmap.”
Speaking more elaborately on the plan for
the Niger Delta, Kachikwu said the federal
government would be launching a $10
billion infrastructure rebirth programme for
the Niger Delta region, but that its
implementation would be on instalment
and its funding not exclusively from the
federal purse.
He said that the Niger Delta state
governors would have to meet to decide
which cross boarder infrastructure the fund
would be expended on.
According to him, “What is more important
is not the number but the
conceptualisation of the process. It is a
fact that governors will have to come
together from the region to begin to look at
cross-state investments whether there will
be railways, whether there will be power
facilities, whether there will be specialist
hospitals or whatever.
“But right now, there is a slowing down of
investment in the region and that is not
helping the region. So, we are going to be
pulling in NNPC and groups like that and
ensure that we look at cross boarder
investment in the region,” he stated.
He said Buhari would also seek to review
the way 13 per cent derivation allocation to
the oil producing states is applied by
beneficiary states.
According to him, the government would be
appealing to the state governors, who have
now taken the allocations as their main
budgeting tool, to channel the funds to the
core areas where oil is produced.
He said: “The president is also reviewing
the proposal we gave him to look at how
the 13 per cent derivation is applied. Right
now it is a budgeting tool for state
governments. We are going to be appealing
to them to begin to put that into the core
areas of the oil producing communities.
And not just see it as a budgeting number.”
On transparency in the oil sector, he said
that the adoption of Treasury Single
Account (TSA) had assisted to tackle
corruption in the industry by bringing all its
funds into one account.
The minister also spoke on the expected
impact of the new roadmap and said that
investments in Nigeria’s oil and gas sector,
which took a downturn in the recent past
would soon pick up following the
conclusion of a review of the country’s
Joint Venture Cash Call (JV) framework.
According to him, on the back of the
review, a lot of oil and gas investors are
pushing to come back and invest heavily in
the country’s oil and gas sector.
He said that there would be an explosion
of investment in the sector soon.
Kachikwu also said there were plans by the
government to review the mechanism of
securing oil and gas installations in the
country to conform with standard practices
as obtained in other oil and gas producing
climes.
The launched policy document is couched
in ‘The 7 Big Wins,’ theme, which borders
on policy and regulation, business
environment and investment drive, gas
revolution, refineries and local production
capacity, Niger Delta and security,
transparency and efficiency, as well as
stakeholder management and international
co-ordination.
He said each time he projected a rise in the
country’s oil production to 2.2 million
barrels per day (mbpd) and 3mbpd, they
were based on the fact that the JV
structure had been reviewed and funding
issues sorted out.
“On the issue of JV cash call. We have
done a yeoman’s job. We are nearing
completion of those negotiations, it would
go to the FEC and it does not require a
law. Those things are basically MoUs,” he
said, adding: “We are going to structure the
MoUs to enable them find the funding they
require. There is even a budgeting process
in terms of what we approved should be
done, but how you now sequence the
distribution of the funding is where the
catch is.”
He said the government had made a lot of
progress on funding, explaining that over
$1.2 billion would be saved.
The minister projected an explosion of
investment, saying oil companies were
planning to make a big splash with projects
and backed by huge money as they return
to the country.
http://www.thisdaylive.com/
index.php/2016/10/28/buhari-to-
launch-10bn-niger-delta-reconstruction-
fund/
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