The Federal Government is soliciting to raise between $40 to $50 billion from Chinese investors in the next few days so as to fund infrastructures in the Nigerian petroleum industry.
Mr. Ibe Kachikwu, the Minister of State for Petroleum Resources, stated on Monday, that crude oil output in Nigeria has risen to 1.9 million barrels per day and is estimated to rise further to 2.2 million barrels by next month when repairs are completed on some of the damaged pipelines.
He made the statement during an interview with Bloomberg Television, on the sideline of the Nigerian National Petroleum Corporation, NNPC-China Investors’ Roadshow 2016 in Beijing — a Roadshow that was a follow up to President Muhammadu Buhari’s visit to China in April. Kachikwu reportedly led a powerful team of NNPC top management and key stakeholders to the roadshow as well.
The Minister 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.
Such investment with huge capacity to put money in the oil sector, he said, is what the country needs and in which many companies in China are showing significant interest to invest in Nigeria.
The minister 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.”
Nigeria, among other few countries, had failed to invest in covering the infrastructure gap in the downstream sector, in pipelines, refining and gas to power, hence the need for new resources as key to diversify the country’s resources, he said.
Speaking on the fallen 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.”
Contrary to reports that Nigeria’s crude oil production has hugely declined over the last few months, the minister stated that the country is on point with average of 1.9 million to 2.2 million barrel of oil per day which is basically the threshold of 2.2 million barrels budgeted for the year 2016.
However, Kachikwu acknowledged that in the months of May and June, the country suffered a lot of militant attacks which took Nigeria’s crude oil output down from about 2.2 million to 1.3 million barrels.
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On ways to shore up the country’s oil output, he said,
“We have managed to begin 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.” he concluded.