27 June 2016, Abuja – The Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, on Monday, disclosed that the country is seeking to raise between $40 billion and $50 billion from Chinese investors in the next couple of days to bridge infrastructure funding gap in the Nigerian petroleum industry.
This was even as he stated that Nigeria’s crude oil output has risen to 1.9 million barrels per day and would rise further to 2.2 million barrels by next month when repairs are completed on some of the damaged pipelines.
Kachikwu, stated this in an interview with Bloomberg Television, on the sideline of the Nigerian National Petroleum Corporation, NNPC-China Investors’ Roadshow 2016 in Beijing.
The roadshow, the NNPC stated was a follow up to President Muhammadu Buhari’s visit o China in April. Kachikwu, the NNPC said, led a powerful team of NNPC top management and key stakeholders to the roadshow.
Kachikwu also disclosed that the meeting has started to yield positive report, as a potential deal for $8.5 billion of investment with North Huajin Chemical Industries Group Corporation (Huajin Group) under China North Industries Group Corporation (NORINCO GROUP) has already been signed.
According to Kachikwu, the country is eyeing such investment from China, which he said has a huge capacity to put money in the oil sector, while he added that a lot of companies in China are showing significant interest in investing in Nigeria.
He said, “We just came out of signing a global $8.5 billion potential investment by one of the companies, NORINCO, in the upstream business in Nigeria. We are beginning the major road show this afternoon (Monday). We are looking to raise about $40 to $50 billion which covers the infrastructure gap that we see in Nigeria. So the interest is enormous.”
Kachikwu lamented that over the years, Nigeria, as well as a few other countries, had failed to invest in covering the infrastructure gap in the downstream sector, in pipelines, refining and gas to power. According to him, the need for new resources is very key, especially as the country does not have those resources, while he stated that going to places like China, which had shown a huge capacity to put money in the oil sector, is very helpful.
Commenting on the dwindling oil price and its impact on investing in Nigeria, Kachikwu said, “As much as we do agree that the price of oil has slid, obviously, and creates a lot of challenge for investors. But the reality is that for countries like Nigeria and indeed for most OPEC countries, you still find that price per cost barrel of oil, it still provides enough incentives.
“And what we need to do is continue to drive down our cost, create policies that are encouraging, focus government attention on the long and short term gains and encourage investors, both from the point of view of investing in a country like Nigeria and also looking at how Nigeria impacts the whole of Africa. This country is an important place to put money in, in the oil sector at least.”
Furthermore, Kachikwu debunked reports that Nigeria’s crude oil production had recorded significant decline over the last couple of months, stating that from January right to April of this year, Nigeria is producing an average of 1.9 million to 2.2 million barrels per day, which is basically within the threshold of 2.2 million barrels that was budgeted for the year.
]He, however, noted that in the months of May and June, the country suffered a lot of militant attacks which took the country’s crude oil output down from about 2.2 million to 1.3 million barrels.
On ways to shore up the country’s oil output, he said, “We have managed to have begin to lead conversation with the militants. A lot of engagement is taking place on the authorization of His Excellency, President Muhammadu Buhari; we have been able to get production up back to about 1.8 million to 1.9 million barrels per day as of two days ago. We are continuing those conversations.
“By the time the Forcados pipeline is repaired, in July, we should be able to come back to expected production ceiling for this year, which is 2.2 million barrels and begin to look if we can increase a bit, to enable us to cover the gap of the two to three months hiatus that we had.
“Things are looking up, engagements are trending positively, and we have been able to make in-road into those conversations. But what is more important is the need to continue that momentum and to look for a long term solution to the Niger Delta crisis that continues to create the militancy difficulties that we had.”