…I had to box my way through CBN for forex – Kachikwu
09 April 2016, Sweetcrude, Abuja – The Federal government has disclosed that international energy companies in Nigeria have agreed to provide about $200 million to help fund fuel imports amid a foreign currency shortage, the minister of state for petroleum.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who disclosed this in a video posting on Facebook, noted that Nigeria will get $200 million in badly-needed hard currency from oil majors to pay for fuel imports and ease petrol shortages hitting the country.
He said, “For the first time in this country, I have been able to convince the upstream oil companies to provide foreign exchange buffers over the next one year for those who are bringing in products.”
According to Kachikwu, multinational oil and gas companies including Total SA and Exxon Mobil Corp will provide dollars to their local retail units, Total Nigeria Plc, and Mobil Oil Nigeria Plc., while Royal Dutch Shell Plc has been paired with local oil importer Conoil Plc, and Eni SpA with Oando Plc.
There was, however, no mention of what is in it for the energy companies in the deal.
“I had to box my way through the CBN (central bank) to get a bit of (foreign exchange) allocation,” he said, blaming the fuel shortages also on a surge in pipeline attacks interrupting crude flows to refineries.
Kachikwu also said in the video crude flows had been resumed to the Port Harcourt, Warri and Kaduna refineries.
Last month, Kachikwu disclosed that the Nigerian National Petroleum Corporation(NNPC) was in talks with Chevron , Total and ENI to get help revamping its ailing refineries.
Kachukwu worked as a top echelon staff in Exxon Mobil Corporation before becoming Nigeria’s junior minister of petroleum.Companies importing fuel in Nigeria have been hindered by a lack of access to foreign exchange following the plunge in the price of oil, the main foreign income earner for Africa’s largest oil exporter.
This has resulted in widespread supply shortages across the country of about 180 million people that the state-owned Nigerian National Petroleum Corporation has been unable to address, he further stated.
The country imports about 70 percent of its refined fuel needs after decades of poor maintenance and mismanagement left four state-owned refineries working at a fraction of their 445,000 barrels per day capacity.
NNPC Chief Operations Officer in charge of Downstream, Mr. Henry Ikem-Obih, stated last week that paucity of foreign exchange (forex) as one of the major reasons for the scarcity witnessed across the country, stating that with the decision of upstream oil and gas companies to provide foreign exchange to oil marketers, there would be a significant improvement in the second quarter and beyond.
He said, “As you know, forex was one of the prime reasons we did not do well in the first quarter. Most marketers, who had allocation, could not import because they do not have forex.
“The minister has worked very closely through his initiative with the upstream oil companies. So, we have a number of them on board to support local entities, that is, downstream companies.
“They will help provide foreign exchange for them to import and meet their Petroleum Products Pricing Regulatory Agency, PPPRA, allocations. Through the CBN, NNPC would support importation of fuel in the second quarter.
“These oil companies also would work with us, including the CBN. These combined efforts, we hope, would enable us to meet a 100 percent of import requirement for the second quarter.”