The Federal Government plans to attract $10 billion investment into the oil and gas industry yearly to bridge infrastructure gap.The Minister of State, Petroleum Resources, Dr Ibe Kachikwu stated this yesterday at the ongoing Nigeria Oil and Gas conference in Abuja while presenting his paper titled: Reforming and Repositioning the oil and Gas Industry in Nigeria.
The minister said the investment will address the challenges currently facing the entire oil and gas industry covering pipelines, refineries, gas and power, facility refurbishments and upstream financing. He added that the objective is to bridge the infrastructure funding gaps in the sector.
He said: “Time has come to bring down the cost of crude oil production and put the right incentives in place. Currently, we have cost and technological issues. Between 2015 and 2016, we took drastic measures on how to moderate prices while from July 2016, there have been lots of stability in the downstream economy. There are still some challenges but there is work in progress.”
Kachikwu highlighted the problems in the upstream sector to include the $6billion Joint Venture (JV) funding debt and other litigations, cost of production per barrel, which is currently between $27 and $28. The government he said wants to bring it down the production cost to $18.
He said the government has reached an agreement with the international oil companies (IOCs) in JV with the Nigerian National Petroleum Corporation (NNPC) to cut down the cash call debt to $5.1 billion, which he noted would be paid by government over the next five years through incremental oil production volumes.