Abuja — Minister of State for Petroleum Resources, Chief Timipre Sylva, has stated that the passage of the Petroleum Industry Bill (PIB) would play a significant role in the country’s quest to drastically cut crude oil production cost.
Speaking in Abuja, Sylva also disclosed that the executive was on the verge of concluding the PIB and would be sending the bill to the national assembly within the next couple of weeks.
He said the bill was pivotal to the Federal Government’s quest to reform the petroleum industry and address fiscal issues that would help bring down the cost of production.
Sylva further stated that the Federal Government was already engaging with members of the national assembly and other critical stakeholders to ensure speedy passage of the bill immediately it is submitted by the executive.
He said: “We are presently reaching the end of the PIB. It would be sent to the National Assembly in the next couple of weeks. We are waiting for the PIB to be passed so that we can move in our quest to cut production cost.”
Sylva explained that the decision of the government to discontinue subsidy payments was due to the fact that it was benefitting only certain sections of the country and not the entire population, adding that before the removal, discussions were held with oil marketers and stakeholders.
He stated that the government had created a level playing field for all stakeholders, noting that private oil marketers can now access foreign exchange at the same rate with the Nigerian National Petroleum Corporation (NNPC), who would not enjoy any undue advantage going forward.
However, he added that the government would continue to intervene in the determination of the price of petrol, to ensure that oil marketers do not shortchange Nigerians.
Also speaking, Group Managing Director of the NNPC, Mallam Mele Kyari, added that the PIB would make the NNPC commercially viable, profit-driven and help it in reducing its cost of production.
However, he said: “We are not waiting for the PIB; every step we are taking today is to ensure that we are commercially viable, cut down on our cost to make us profitable among others.
“Today, we do 80 per cent to 90 per cent of our business through automation. This company is changing for the better and it will remain an entity that all Nigerians will be proud of.”
Kyari also explained that the NNPC was adopting the Build, Operate and Transfer (BOT) model in the rehabilitation of the refineries because of the paucity of funds, adding that in the new model which would see the complete rehabilitation of the refineries by middle of 2023, the NNPc would become a minority shareholder in the refineries.
Furthermore, Kyari said the NNPC helped Nigeria to save $300 million in the Ajaokuta-Kaduna-Kano, AKK, pipeline project, as it was able to renegotiate the project down from the initial $2.8 billion to $2.5 billion.
He said, “The cost is $2.5 billion. It was initially $2.8 billion. It was supposed to be financed by local partners, but the local partners were not able to raise the money, which made NNPC to take it up and renegotiated the contract and brought down the sum.
“The project would pay for itself from its own cash flow. This is why the financing was secured from the financiers.”