… Govt saves N15.4bn from subsidy removal monthly
…Nigeria’s oil production rises to 1.8mbpd
The federal government yesterday confirmed the discovery of crude oil in Borno State, North East Nigeria, thus raising the hope of the region joining the league of oil producing areas in the not-too-distant time.
The disclosure was made by the permanent secretary, Ministry of Petroleum Resources, Dr. Jamila Shua’ra, when she presented her welcome address at the presentation of the 2016 petroleum sector scorecard held at the auditorium of the Petroleum Technology Development Fund (PDF) in Abuja yesterday.
She brandished the discovery of crude oil in Borno State as one of the achievements of the ministry during the year, saying, “Our doggedness culminated in the discovery of oil in new frontiers – Lagos and Borno.”
Shua’ra listed other achievements of the ministry.
“Today, as a team, we have recorded commendable achievements in our sector: the introduction of the PMS Price Modulation Matrix; the availability of PMS in all outlets; eradication of payment on fuel subsidies; located foreign direct investment to finance midstream oil and gas infrastructure; adopted exit strategies on Joint Venture Cash Call; robust engagement of host communities to reduce agitations; creation of more stable industrial relations,” she said.
Collaborating her statement, Vice President Yemi Osinbajo stated that the deregulation of the downstream sector, which led to the elimination of petroleum subsidy, saved the government a burden of N15.4 billion monthly.
The vice president, who was represented the attorney-general and minister of justice, Alhaji Abubakar Malami, stated that the oil and gas sector remain very critical to the stability and growth of the nation’s economy as it accounts for about 90 per cent of the country’s earnings, in addition to contributing substantially to the inflow of foreign exchange and growth of foreign reserves.
Prof. Osinbajo further disclosed that the Federal Executive Council (FEC) had recently approved new measures and strategies aimed at eliminating the burden of Joint Venture Cash Call arrears and easing future payments in the up-stream sector, stressing that the strategies are fully supported by the National Economic Council (NEC).
He noted that the measures will boost additional investments and raise daily production levels to about 2.8 million barrels per day (mbpd) in the long-run.
On his part, the minister of state for petroleum resources, Dr. Ibe Kachikwu, revealed that one of the fallouts of the removal of petroleum subsidy was the decline of the nation’s daily consumption of the premium motor spirit (PMS), from the 50 million litre per day (mlpd) previously to the current figure 28mlpd.
On the issue of militancy in the Niger Delta, the minister said negotiations are at top gear, adding that the government targeted to achieve zero militancy for the industry in 2017.
The chairman, Senate Committee on Upstream Petroleum, Senator Omotayo Donald, in his speech, commended the petroleum resources ministry for embarking on the reforms, and pledged that the National Assembly will support the efforts with all the legal backing required to achieve the transformation of the sector.
He assured Nigerians that the first part of the Petroleum Industry Bill (PIB) will be passed by the National Assembly by the first quarter of 2017.
He further advocated the inclusion of the local content requirement in every phase of the reform being initiated in the sectors.
Meanwhile, Nigeria’s oil production has risen to close to 1.8 million barrels per day (bpd), minister of state for petroleum resources, Emmanuel Ibe Kachikwu, said ahead of the expected signing of a deal over repayments of $5.1 billion in debts from joint venture projects.
Kachikwu is due to sign the deal later today with oil majors, ExxonMobil, Royal Dutch Shell, Eni and Chevron.
Nigeria has struggled with debt to oil majors amid the fall in oil prices over the past two years. The country has also been hit by output falls from peak production of 2.2 million bpd as a result of persistent militant attacks in the oil-producing Niger Delta.
The Forcados crude stream, with roughly 300,000 bpd, has been under force majeure since February, and, in the third quarter production, was roughly 1.63 million bpd, according to the country’s statistics office, National Bureau of Statistics.
Nigeria’s fight to regain oil production enabled it to gain an exemption from a recent deal between OPEC and other oil producers to cut output to support prices.
“I wouldn’t worry about (non-compliance) issues,” Kachikwu said of the cut plan, adding that “everybody has” the October production figures from which countries agreed to cut.
Kachikwu said Nigeria’s primary goals for 2017 would be to secure “lasting peace” in the Niger Delta, gain external funding for oil investments and improve its oil refining system.
Nigeria’s oil refineries hit peak production for 2016 in October, but it was just 23.53 per cent of their installed capacity, and with an output of 210 million litres, it is only a fraction of the oil products the country needs.
NNPC has been importing as much as 90 percent of gasoline requirements due to a persistent shortage of foreign exchange, also brought on in large part by falling oil prices.
Kachikwu said that while queues at petrol stations are gone, “there are still foreign exchange issues.”