- To replace annual lifting contract with 10-year locked-in deals
Nigeria will from this year begin to
track the volume of its crude oil production from fields of production
and loading bays, to sales destinations in a renewed effort to cut down
on prevalent oil theft and loss of revenue, the Minister of State for
Petroleum Resources, Dr. Ibe Kachikwu, has said.
Speaking in a podcast he released
tuesday in Abuja where he made projections of his work this year,
Kachikwu also said he would initiate processes to gradually move the
country away from holding annual crude oil lifting contracts to looking
for partners that it could sign long-term lifting agreements with.
The minister explained that the country
has lost huge revenues from oil production slippages and thefts, and
would in this regard finally move to stop these practices.
“We will begin for the first time to
track oil production from production to destination, there are too many
slippages and leakages and stories about produced oil in Nigeria. This
year, we are going to commit to try tracking our oil so that from the
moment one molecule is produced to the time it is sold and where it is
sold, we will be able to track that and if we do that, we envisage
billions of dollars in savings for the federal government,” said
Kachikwu.
He stated that his preference for a
long-term crude oil lifting contract against the current short-term
regime was based on the need to create some level of contract certainty
in marketing Nigeria’s crude oil grades.
According to him, “We are going to firm
up long-term markets, we must stop the year-to-year crude terms
contracts and gas sales. We have to go to the long-term markets that is
what everybody in the world is doing.
“Nobody is letting their oil to
circulate and be priced inappropriately in the international market. You
have got to find who your term partners are, what do they want, how do
you sign five, six, seven, 10 years contract and gravitate away from the
year-to-year contract that you see in this industry.”
The minister equally stated that the
government would within this year conduct oil license renewals and
allocations early enough to raise money to fund the 2017 budget.
He said: “In 2017, we are going to be
running with rocket speed, we have so much to do. We are going to firm
up our policies, be able to gazette all our oil and gas policies and
then pass the PIB (Petroleum Industry Bill). We are going to accelerate
Federal Government’s revenues and look into areas where we could have
made more monies.
“We will raise money to finance the
budget through improvements in royalties’ collections, through early
renewals of leases and every other areas. We are going to be conducting
oil blocks allocation and marginal fields awards to try and raise money
for the government and get investments in some of those sectors.”
He said he would collaborate with the
International Oil Companies (IOCs) and demand they bring in investments
into the country, adding that his first investors’ relations tour would
start with a visit to Agip in Italy and then to others, including
indigenous oil firms.
On gas, he said: “Gas revolution is key
for us, first we will like to track gas flares and commercialise it so
that no more flare will happen in this country. We have set our 2020
date for ourselves and want to make money from the flare.
“We want to look at our gas
infrastructure facilities that are suffering, some of them are
constructions going on for over 10 years, we need to move on and find
out how to complete these investments.”
He noted on his expectations from the
Nigerian National Petroleum Corporation (NNPC) that demands would be
made on its semi-independent refineries, gas, downstream and upstream
units to begin to be self-accounting in a way they can take
responsibilities for their profits and losses.
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