Implementation strategies to boost petroleum sector -Petroleum Minister

Implementation strategies to boost petroleum sector -Petroleum Minister

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The Minister of State for Petroleum, Dr. Ibe Kachikwu, has identified key implementation strategies to boost the petroleum industry and enable export of refined products by 2019.
Kachikwu stated that policy and regulation; business environment and investment drive; transparency and efficiency; stakeholder management and international coordination is the primary concerns of the ministry.
Kachikwu said that the oil and gas will drive diversification and drop in oil production daily to 1.56 billion barrels from the annual estimate of 2.2 billion barrels daily will negatively affect growth.
The minister emphasised the need to empower the Niger Delta region and ensure peace in the region by stopping militancy in enhancing the attainment of national aspirations in oil and gas production.
Kachikwu revealed that a lot of companies in the sector were indebted in payment of royalties, adding that the companies in default added up to a total of $4 billion.
He said there was the need for policies on oil, gas, downstream and fiscal reform, adding that the proposed petroleum industry bill had become very imperative.
Kachikwu said there were challenges in the oil and gas sector, which led to drop in the nation’s GDP growth from 6 per cent to 4 per cent.
The minister said this had led to shortage of funds for providing critical infrastructure and that there was a 29 per cent decline in oil production, which amounted to a loss of 700,000 million barrels per day.
Accordingly, there was 32 per cent decline in gas production from 8,000 million cubic feet per day to 5,500 million cubic feet.
Kachikwu announced that 3,000 pipeline vandalism incidents were recorded from 2010 to 2015, while 643 million litres of petroleum products, amounting to N51.28 billion, was lost in 2015 alone.
The minister explained that between January and June 2016, the ministry recorded 1,600 vandalism incidents in spite of efforts to boost local production and refining of products.
He also said: “Until we are able to locally refine what we produce, we won’t be able to go forward.
“It is the plan of the ministry that by 2019, the country has to export Premium Motor Spirit.”
Kachikwu advised investors to embrace the ministry’s policy for creating modular refineries and asked them to come up with proposals.
He noted that some successes were recorded in the oil and gas sector since November 2015, including the elimination of subsidy payments yielding N15.4 billion monthly savings.
Kachikwu had started the liberalisation of downstream sector with 47 per cent reduction in PMS truck loads and signing of $80 billion MOUs at the China Investors Roadshow in June 2016.
The minister said plans were on to increase oil production to 1.8 billion barrels per day by October and to 2billion barrels by December.

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