The Minister of State, Petroleum Resources, Dr. Ibe Kachikwu has said the time has come for the Nigerian government to relinquish its vast oil and gas assets to the private sector in order to bridge the huge $45 billion infrastructure deficit.
Kachikwu in his ministerial address at the ongoing Nigeria Oil and Gas Conference in Abuja, yesterday, said government hopes to attract about $10 billion investments to the petroleum sector in the next five years.
He said government decision to exit the Joint Venture Cash Call model for financing projects was a major step to allow the industry finance itself without placing burden on the country.
While admitting that there were still governance issues in the sector, he stressed that government was on the right path to reform the sector.
He explained that the expected investments would address challenges facing the oil and gas industry, covering pipelines, refineries, gas and power, facility refurbishment and upstream financing.
According to him, “Time has come to bring down the cost of crude oil production and have the right incentives. Three years ago, we have cost issues, technological issues but not issues of where the money would come from because of crude price regime.
“Between 2015 to 2016, we took drastic measures on how to moderate prices, while between July 2016 and now, there have been lots of stability in the downstream economy. There are still some challenges but work is in progress”.
Kachikwu said the new cash call policy will free up government resources to fund other projects, noting that it will also ensure production stability for the oil and gas sector.
He assured the operators that the outstanding debt of $5.1 billion would be paid over five years through incremental oil production volumes.
“There are still some governance issues to be addressed but once this is resolved, there is expected to be improvement in oil production.
“We are left with options of bringing in investors that will help address the over $45billion infrastructure deficit. Government wants to be bold enough to take steps that have not been taken before. We have to release our assets to private investors.
“Either gas pipeline, crude pipeline, the time has come to move from government ownership to private ownership for efficiency”, he said.
Kachikwu said that effort is ongoing in addressing the challenges in the Niger Delta region to boost oil production.
He said that government planned to grow oil production to three million barrels per day.
To achieve this, he said government is targeting zero vandalism of oil and gas facilities by restive youths in the oil rich Niger Delta region.
“We have set a target of zero militancy for 2017 and it is achievable due to lots of community based activities and motivation,’’ stressing that “We have to collaborate with the oil companies, state governments and see how we can capture some benefits that will come from this.
“We have been seeing engagement of youths and we expect more improvement day by day. The states must make their mini-economy agenda and they will work with security agencies”, he added.