- Expects 22% rise in oil output to 2.2mbpd
The federal government is set to sign a
cash-raising oil deal with India for $15 billion by the end of this
year, just as Nigeria’s oil production is also expected to rise by 22
per cent to 2.2 million barrels per day in the same period when oil
companies lift the force majeure on fields that were shut down as a
result of militancy in the Niger Delta.
A statement from the Director, Press in
the Ministry of Petroleum Resources, Idang Alibi, said that the Minister
of State for Petroleum, Dr. Ibe Kachikwu, negotiated a $15 billion
investment with India monday with terms to be agreed, where the Indian
government would make an upfront payment to Nigeria for crude purchases.
This, the statement explained,
would be repaid on the basis of firm term crude contracts over some
years and in consideration for Indian public sector (PSU) companies
collaborating in the refining sector as well as exploration and
production activities on a government-to-government basis by Indian PSU
companies, long term contracts for supply of crude to Indian PSU
companies from Nigeria, and also possibilities of executing CGD and LPG
infrastructure projects by Indian PSU companies in Nigeria.
Kachikwu, who is currently on a
three-day visit to India, concluded talks on the investments in
Nigeria’s oil and gas sector in a bilateral meeting with his Indian
counterpart, Shri Dharmendra Pradhan.
Both ministers, said the statement,
noted the existing and significant engagement between the two countries
in the hydrocarbon sector, while acknowledging that Nigeria was one of
the largest trading partners of India in Africa, which is dominated by
import of crude oil and gas from Nigeria.
In 2015-16, India imported nearly
23.7MMT of crude (nearly 12 per cent of India overall imports) and over 2
MMTPA of LNG from Nigeria.
Following this negotiation, the two
countries have agreed to work on a memorandum of understanding (MoU) to
facilitate investments by India in the Nigerian oil and gas sector and
specifically in areas such as the term contract, participation of Indian
companies in the refining sector, oil and gas marketing, upstream
ventures, the development of gas infrastructure, and in the training of
oil and gas personnel in Nigeria.
The MoU is expected to be firmed up in
December 2016 during PETROTECH-2016. Both ministers also agreed to
strengthen the existing cooperation in the oil and gas sector, and in
particular to explore investment opportunities for Indian public and
private sector companies in Nigeria.
On the sidelines of the visit, Kachikwu
had one-on-one meetings with top executives of Indian public sector oil
and gas companies and also representatives of some Indian private sector
oil and gas companies.
Speaking further on Nigeria’s oil
output, Kachikwu said he hoped the force majeure on all the country’s
oil fields would be lifted by December 2016 or January 2017.
Reuters confirmed that India’s oil
ministry said that Nigeria, whose economy has been hit hard by low oil
prices and militancy, had requested an upfront payment.
“Nigeria has a bit of a cash flow
problem right now. Our reserves are not as strong as we want them,”
Kachikwu told reporters in New Delhi, the Indian capital.
“The impact of that is the value of the
naira (currency) is coming down. So what we are trying is to leverage on
the assets we have to receive immediate cash,” Kachikwu added.
He said the Organisation of Petroleum
Exporting Countries (OPEC), which had agreed to cut world output to
shore up prices, has however allowed a production window of 1.8 million
bpd to 2.2 million bpd for recession-hit Nigeria.
Apart from the impact of low oil prices,
whose sales account for 70 per cent of the federal government’s
revenue, the country’s oil and gas production facilities have been
crippled by attacks by militants.
Attacks by Niger Delta Avengers (NDA)
and other militant groups have curbed Nigeria’s production, with
ExxonMobil’s Qua Iboe, Nigeria’s largest export stream, and Shell’s
Forcados still under force majeure.
Kachikwu, who said oil prices would rise
from current levels by December, met the Indian oil minister to discuss
expanding energy ties between the two countries.
In the last fiscal year ended March 31, Nigeria accounted for nearly 12 per cent of all crude oil imports by India.
“We agreed on significant potential for
diversifying (India’s) engagement in E&P (exploration and
production), refinery building and marketing in Nigeria,” Pradhan said
in a tweet.
In 2014, India took over from the United
States as the largest importer of Nigerian oil, according to statistics
by the Nigerian National Petroleum Corporation (NNPC).
While India accounted for imports of 30
per cent of Nigeria’s crude, the U.S., which initially reduced its oil
demand from Nigeria to 250,000 barrels per day, later completely stopped
oil imports from Nigeria due to increased domestic shale gas and oil
production.
Shale oil production in the U.S. has led
the International Energy Agency (IEA) to forecast that the U.S. will be
largely energy independent by 2035.
However, the NNPC’s monthly report for
June 2016 showed that for the first time in over two years, the U.S.
overtook India as the biggest importer of Nigeria’s crude oil.
According to the report, the U.S. bought
10.79 million barrels of Nigerian crude in June, up from 4.76 million
barrels in May, while India’s imports stood at 9.62 million barrels,
down from 16.29 million barrels in January.
NNPC’s report further showed that U.S.
imports of Nigerian crude rose by 577.8 per cent in the first quarter of
2016, compared to the same period in 2015.
In February 2016, the U.S. imported
12.12 million barrels from Nigeria, making it the second largest buyer
of the country’s crude after India, the report added.
0 comments:
Post a Comment