RMAFC Backs FG’s $15bn Cash-for-Oil Deal with India


By James Emejo in Abuja

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) yesterday threw it weight behind the $15 billion cash for oil deal which was recently negotiated on behalf of the federal government with the Indian government by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, in a bid to shore up the country’s foreign reserves.

Under the terms of agreement, the Indian Government is expected to make an upfront payment for crude oil purchase to Nigeria, which is to be repaid on the basis of firm Term Crude Contracts over some years whereby Indian public sector companies would collaborate in refining as well as exploration and production with long term contracts for supply of crude oil to Indian PSU companies from Nigeria and possibilities of executing CGD and LPG infrastructure projects by Indian PSU companies in Nigeria.

The commission, in a statement signed by its spokesman, Mr. Ibrahim Mohammed, stated that it had “always been advocating that instead of selling off Nigeria’s strategic assets to solve its short term expenditure requirements, the country should look elsewhere to attract long term investments like this that would bring good returns for the economy through employment generation, wealth creation and sustainable development.”

According to the statement: “In order to arrest the high incidence of gas flaring and harness the huge potential in the gas sub sector in Nigeria which ranks seventh in the world and first in Africa with natural gas reserves base totalling 188 trillion cubic feet (Tcf) as at May 1, 2015, wealthy Nigerians and foreign investors should be encouraged to set up several LNG projects as possible.

“There is no reason why the country should not have 4 to10 LNG projects which would add value to production, create employment, enhance economic development and subsequently increase revenue generation for the federation.

“In this regard, RMAFC commended Dangote Industries Limited (DIL) on the recent acquisition of Twister B.V., a Dutch company headquartered in the Netherlands delivering reliable, high-yield and robust solutions in natural gas processing and separation to the upstream and midstream oil and gas sectors.”