BUSINESS Insecurity, policy somersault deprive Nigeria of $300bn oil investment – Kachikwu
Minister of state for Petroleum Recourses, Ibe Kachikwu has said that investments worth over $300 billion have disappeared in the nation’s oil sector in the last five years due to low oil prices and insecurity as well as inconsistent policies.
Speaking at this year’s international conference of the Society of Petroleum Engineers, Kachikwu said investment is fast disappearing in the sector while other African crude oil producing state are taking over such investments.
Kachikwu who also visited the $17 billion Dangote Refinery yesterday said the project would put an end to $28 billion annual expenditure on petroleum products importation into the country.
He said the Dangote refinery would set the pace for the private sector to solve Nigeria’s problem of petroleum products.
The minister who said he was impressed by what he has seen said Nigeria would stop import of petroleum products in 2019.
“I am not going to import petroleum products in 2019 and I am going to stick to this position and so must do everything to make sure that the refinery is ready as scheduled”, he said
He said one of the reasons why Nigerian refinery has failed was due to bad market system but that government together with other stakeholders including MOMAN must collaborate to ensure the removal of market distortions.
“I am happy to see what is really going on here. we are motivated with what is on ground”, he said
Earlier, President and chief executive, the Dangote group, Alhaji Aliko Dangote had commended the minister for his effort in ensuring availability of petroleum products in the country, as well as his present ongoing efforts at revamping our ailing refineries.
Dangote said currently the refinery when completed would be the world’s largest single line Refinery, Petrochemical Complex and the world’s second largest Urea Fertiliser plant.
“The Refinery will have the capacity to refine 650,000 barrels of crude oil per day. The Petrochemical Plant will produce 780 KTPA Polypropylene, 500 KTPA of Polyethylene while the Fertiliser project will produce 3.0 million metric tonnes per annum (mmtpa) of Urea”
“We are also building the largest subsea pipeline infrastructure in any country in the world, with a length of 1,100km, to handle 3 billion SCF of gas per day. We also plan to construct a 570 MW power plant in this complex. As a matter of fact, gas from our gas pipeline will augment the natural domestic gas supply and we estimate an additional 12,000MW of power generation can be added to the grid with the additional gas from our system”
“We will be adding value to our economy as all these projects will be creating about 4,000 direct and 145,000 indirect jobs. We will also save over $7.5billion for Nigeria annually, through import substitution and generate an additional $5.5billion per annum through exports of the refined petroleum products, fertilizer and petro chemicals. We envisage that these projects, which would cost over $18billion, would be completed in 2019”, he said
“There is also infrastructural gap. Unlike most countries in the world, Nigeria as a country has not focus on oil infrastructure. There is huge infrastrural deficit in the sector. When I went to China last year, we took a document that shows us we have about $50 billion infrastructure gap. This Include pipeline facility to crude oil production and until government hand off the business. Most of the infrastructure were provided by government . In my view, this is not the right process. We have not engaged the private sector sufficiently . Now that we need to bring them in, it is now a win/win for everybody. One of my strategies is to move dialogue from public sector to private sector support infrastructure and that is exactly what we are trying to do with the refinery, providing private sector funding to finance the refinery”, he said
From left: Minister of State for Petroleum Resources, Ibe Kachikwu; Group Executive Director, Strategy, Capital Projects & Portfolio Development, Dangote Industries Limited, Devakumar Edwin; and President/CE, Dangote Industries Limited, Aliko Dangote, during the minister’s visit to Dangote Oil Refinery, Petrochemical and Fertilizer Projects in Lekki, Lagos yesterday. ARIK AIR