…As NLNG seeks $15bn for Train 7
From Juliana Taiwo-Obalaonye and Adewale Sanyaolu
The Federal Government yesterday, launched a $10 billion infrastructure programme in the restive Niger Delta region as part of plans to end an insurgency that has hobbled oil production.
Consequently, President Muhammadu Buhari will meet representatives of militant groups and community leaders from the Niger Delta in Abuja next week in a bid to end the attacks on oil installations in the region. Emmanuel Ibe Kachikwu, the Minister of State for Petroleum resources said.
Speaking to a forum in Abuja aimed at outlining strategy for the petroleum industry, Kachikwu described bringing the insurgency to an end as the first goal of a seven-point plan.
“Our target is to ensure zero militancy in the area,” he said. “This planned meeting shows the level of interest the president has to ensure peace in the area.”
The $10 billion investment is “not necessarily” going to come from the Federal Government but rather from “oil companies, investors and individuals,” he said.
Militants fighting for a greater share of the OPEC member’s wealth complain of poverty and a lack of development across the Niger Delta region where most of Nigeria’s oil is pumped from.
The Seven Big Wins strategy also envisages passing a long-delayed Petroleum Industry Bill (PIB) by December. The bill, which covers everything from an overhaul of state oil company, NNPC, to taxes on upstream projects, was delayed by violence in the Delta, which at one point cut production to 30-year low.
The first part of the bill is already pending in the Senate and Kachikwu said the second part, which deals with fiscal aspects of the petroleum industry, is “almost completed” and will be presented to the oil industry in the next week or two. While the government has emphasised diversifying the economy, Buhari said on Thursday it would be impossible to move forward without the oil industry.
“Oil and gas resources still remain the most immediate and practical keys out of our present economic crisis,” Buhari said, and the plan for the industry is “a national imperative and a core thrust of our economic policy.”
To drum up financing and oil investments, Nigeria will hold a roadshow in the Gulf in January and in the United States by mid-2017, Kachikwu told reporters.
One area of investment would be in improving outdated refineries to stop costly fuel imports, he said. “We are going to be licensing private refineries to look at investing in private refineries.”
Kachikwu said Nigeria’s oil output stood at 1.8 million barrels a day, compared with the 1.9 million bpd the Petroleum Ministry announced earlier this week. He added that the government hoped to get back to 2.2 million bpd next year – the level seen at the start of 2016. “We have a capacity to produce three million,” he said.
Meanwhile, the Nigeria Liquefied Natural Gas (NLNG) Limited said it would require about $15 billion to bring its Train 7 on stream.
Its Managing Director, Mr. Tony Attah, stated this when members of the Senate Committee on Gas paid an oversight visit to the NLNG facility in Bonny, Rivers State.
The NLNG boss disclosed that the firm plans to go to the market to raise the $15 billion required for the project, adding that upon completion, it would be capable of generating 18,000 jobs.
This, he said, will enable Nigeria resolve most of the youth restiveness in the country, help the company to remain a global player in the natural gas market while building a better Nigeria.
He assured that Nigeria has sufficient proven and non-proven gas resources to the extent that the country was referred to at a global conference, as “that gas country that has some oil”.
Whereas the country actually classifies its economic strength in terms of oil and not gas, he added that proven and estimated gas reserves at 187 and 600 Trillion Cubic Feet (TCF) respectively, are more than sufficient to serve domestic and commercial needs of the country.
He also pointed out that NLNG has helped to reduce gas flaring from 65 per cent at the commencement of its operations to about 20 per cent today, removing the country from the group of erring nations, with a real chance of further improvement if given the enabling operating environment, including the actualisation of Train 7.
Attah said Nigeria LNG is faced with severe challenges, including operations of multiple regulatory agencies, pipe line security issues, citing 19 recorded pipeline disruptions this year alone as example.
On his part, the Chairman, Senate Committee on Gas, Senator Bassey Albert Akpan, promised that his committee will do all in its power to sustain the NLNG legacy and encourage the entrenchment of the NLNG business model in other parts of the Nigerian economy.
“I am particularly happy with what I have seen and heard today and I will be glad to have your comprehensive presentation slide to share with other members of the Upper Chamber to get them better informed.
“The Senate resisted calls for the sale of government equity in Nigeria LNG because we believe that Nigeria LNG is the most successful oil and gas venture in the country.”
Akpan said a business like NLNG, which has succeeded over decades should be encouraged and assured that the company has the Senators buy-in on the proposed Train 7 expansion programme, which will potentially add an estimated 18,000 new jobs, while reinforcing the company’s position as a major player in the global energy market.
He noted that to achieve this, “we must be able to sustain our output to be able to sustain our profitability.”
He said the visit provided a clear picture and understanding of the trends and issues involved in the business.