• Arrangement will not affect 2.2mbpd budget production benchmark •Minister inaugurates board of PPPRA, PEF and PTI
Chineme Okafor in Abuja
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, yesterday disclosed that the discounted $5.1 billion cash-call debt owed International Oil Companies (IOCs) by Nigeria over a long period would be paid off within five years.
Although Kachikwu did not state when the repayment would begin, he however stated that the repayment timeline was part of the concessions Nigeria got from the IOCs for discounting a whopping $1.7 billion from the cash-call arrears.
He recently disclosed at the 72nd National Economic Council (NEC) meeting that through negotiations with the IOCs, the $6.8 billion past due cash-calls burden on the federation was reduced to $5.1 billion, to be paid on an improved oil output.
Speaking after declaring open the inaugural meeting of the National Council on Hydrocarbon in Abuja, Kachikwu also said within the agreement, the payment from incremental oil production will not affect Nigeria’s budget production benchmark of 2.2 million barrels per day (mbd).
He added that the discount translates to almost N8 billion in savings to the country.
“The first concession obviously is the fact that the country got a discount of $1.7 billion, and that is going to be paid over a period of five years and it will be paid from incremental volume of production and so we are not lynching into our 2.2mbpd to be able to pay for that.
“I think literally when you look at it, it almost translates into fiscals of N8 billions in savings for the government which is very good,” Kachikwu stated.
When asked what the country’s oil production was at the moment following reports of recent production disruptions in the Niger Delta, the minister said: “Still not where we should be. These days I am almost cautious of giving figures so that I don’t attract attention unnecessarily but obviously the Forcados incident did impact us, but my guess is that we are moving closer to 1.9mbpd at this point.”
He said President Muhammadu Buhari approved the formation of the National Council on Hydrocarbon and that its responsibilities will be advisory.
“It is a fact and ideas gathering team, and so everybody presents their opinions, both the military, traditional rulers and stakeholders who would contribute ideas to the hydrocarbon council.
“So, we are basically telling Nigerians, this is your product; this is your economy and issues, what ideas do you have in terms of engagement of communities to help them become part of the policy making process,” Kachikwu noted.
He said it was important that all Nigerians become a part of the policy-making processes in the oil and gas industry, stating that the government was in a hurry to get the oil industry work for Nigeria’s development.
“There is so much, happening in this sector, I am sure if you are following the trajectory of our movement, you will see we are racing that against time.
“So much to do; in terms of refineries which we want by 2019 to move out of importation, funding of the upstream, restructuring of the NNPC, and passage of the long sought-after Petroleum Industry Bill (PIB) or the Niger Delta issues, there is an overload of activities. I urge all of you to pay more interest in this, we need to have creative thinking to the solutions,” he added.
Meanwhile, Kachikwu has formally inaugurated the management board of three parastatals in the ministry – Petroleum Products Pricing Regulatory Agency (PPPRA), Petroleum Equalisation Fund (Management) Board (PEF), and the Petroleum Training Institute (PTI).
The government had in May 2016 constituted board members for the agencies. PPPRA for instance has a former Managing Director of the Pipeline and Products Marketing Company (PPMC), Alhaji Mohammed Buba, as its board chair.
But speaking at the inauguration ceremony yesterday in Abuja, Kachikwu said the new boards were coming at a time when the global petroleum industry is witnessing a downturn in fortuneswhich has also translated to reduction in revenue levels from petroleum by most producer nations.
He stated that the composition of the boards was thorough and persons who have both the experience and knowledge to guide the three parastatals into harnessing their potential and fulfilling the nation’s expectations at this challenging times were selected.
“Last week, Mr. President inaugurated the boards of NNPC, NCDMB and NNRA under the ministry of petroleum and he charged them to achieve a key objective of this administration which is to institutionalise transparency and accountability in the agencies in this critical ministry.
“Mr. President expects you to take full leadership and drive the complete reforms of these parastatals and work closely with their heads,” Kachikwu said.
He further stated: “For PPPRA, the expectation is of the board to provide the necessary steers and guidance to the management on ensuring the maintenance of national petroleum products sufficiency and ensure the growth of the petroleum products strategic reserves.
“For PEF, the expectation from the members of the board is for them to ensure that the automated product tracking system from depots to stations is completed nationwide and every molecule of petroleum product is tracked to the retail station.
“For PTI, the expectation from the members of the board is for them to superintend the transformation of PTI to world class oil and gas training institute that run commercially viable courses and grow the number of high value clients within the industry and make it a cynosure institution in the continent.”
The minister noted that all parastatals must be placed on the path of better performance and efficiency.
He also stated that they must work towards financial sufficiency and move away from getting subventions from the government, in addition to imbibing sufficient transparency in their activities.