Kachikwu: Nigeria is Targeting 2.4mbpd Oil Output in 2016

Source: THISDAY LIVE

Nigeria is targeting 2.4 million barrels of crude oil per day (mbpd) in output in 2016, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has disclosed. Kachikwu spoke recently in Abuja while outlining his broad strategy for the country’s oil and gas sector for the year.

He said that even though the target of 2.4mbpd was not used as a production benchmark for the 2016 budget, he explained that the production volume would be pursued by his ministry.

The minister however noted that about 200,000bpd of the planned total would be dedicated to domestic refining, while 2.2mbpd would be kept for export.

According to him, the country would have been doing 2.3mbpd, but for the attack that was recorded on one of Shell’s Forcados pipeline recently.

“In terms of volumes, I think we are producing at 100 per cent. Before the Shell pipeline incident which happened about a week ago, we were already hitting about 2.3mbpd up from about 2.18mbpd.

“The target this year really, without putting that in the budget, is about 2.4mbpd and to dedicate some of that to total refining capacity and keep our 2.2mb as whole as we can.

“That is still the target we are shooting for and I think that if we have a 100 per cent performance in terms of funding and oil companies are going full blast, so we will see things happen,” Kachikwu said.

He also spoke on the country’s cash-call arrears to international oil companies, saying: “$5.1 billion are in cash call arrears and then we have year-to-year gaps in terms of cash call amounts.

“What this means is that the upstream is not performing at 100 per cent level, they are barely just continuing and you can see the trend in terms of staffing losses, project abandonment and all that.

“But very quickly, we must find a way of finding funding for the upstream. We want to settle the arrears to bring back confidence and to create an alternative funding scheme to cover the gap from year to year so they can work on a 100 per cent basis, and our belief is that if you do that, you will have incremental volumes to help you pay off the loans.

“The target I have set for our people is to work with the majors, finalise all issues of funding, including arrears and the year-to-year gap within a period of four to five months, and once we do that, we can say for 2016 or 2017 at least, we would have dealt with the arrears.”

In another development, a group, the Children and Women’s Rights Network, has alleged that a cabal in the oil sector has mounted a subtle but disingenuous campaign against the Pipeline and Products Marketing Company (PPMC) to prolong the lingering scarcity of petrol in the country.

The Executive Director of the network, Moses Adedeji, said in a statement that was made available to THISDAY, that the decision of the government to involve the Economic and Financial Crimes Commission (EFCC) and Department of State Services (DSS) to checkmate the possible diversion of products in the country had not gone down well with the alleged cabal.

Adedeji said that the Managing Director of PPMC, Mrs. Esther Nnamdi-Ogbue, had then become the subject of attacks by the cabal owing to her efforts to stop the diversion of products. He asked the federal government to be wary of the cabal.

He said: “Less than 24 hours after her appointment as Managing Director of NNPC’s retail arm, a powerful cartel involved in the illegal diversion of fuel stepped up their attacks against Mrs. Nnamdi-Ogbue whose goal was to truncate their illegal business, by using faceless platforms to call for her removal by Kachikwu.

“In the past few weeks, these unscrupulous elements and their collaborators also feel gravely aggrieved that under the supervision of Kachikwu, she deployed hundreds of officials, under the overall supervision of the minister, to ceaselessly monitor defaulting filling stations and fuel distribution across Nigeria.”

Meanwhile, China has said it wants more crude oil exports from Nigeria in spite of the recent changes in oil prices. Mr Zao LingXiang, Economic and Commercial Counsellor of the Chinese Embassy in Nigeria, said this in an interview in Abuja.

“But the total amount of export to China was only about one million barrels in 2015, that was just 1.3 per cent of Nigerian annual oil export,” reported the News Agency of Nigeria (NAN).

“In my opinion, it really doesn’t matter whether Iran comes back or not; Chinese companies want to import more crude oil from Nigeria,” he said. He said that the current trade volume between both countries stood at $14.94 billion in 2014, making Nigeria the third largest trade partner of China in Africa.

The envoy added that Nigeria’s trade figure was 8.3 per cent of China’s total trade volume with Africa and 42 per cent of the total trade volume between China and Africa.

He said that China has also sought to explore other areas of cooperation with Nigeria which he noted would be of benefit to both parties.

“China is the largest developing country in the world and Nigeria is the largest developing country in Africa and both countries have complementary advantages in natural and human resources, funds and markets.

“Right now, the Nigerian government is trying to diversify its economy which is fully in line with the 10 China-Africa cooperation plans announced at the summit on China-Africa trade in Johannesburg in 2015.

“There is great potential for cooperation between China and Nigeria in the fields of industrialisation, agricultural modernisation, infrastructure construction, financial services, trade and investment facilitation, among others,” he said.

He however added that both countries had made “remarkable achievements” in the areas of infrastructure cooperation, noting that the scheduled visit of President Muhammad Buhari to China in April would facilitate the implementation of agreements reached at the 2015 China-African summit in Johannesburg.

LingXiang further added that the president’s visit would also deepen cooperation between both countries, explaining that the total investment volume between China and Africa exceeded $100 billion in 2015 in spite of the decline in imports from Africa.

He added that Africa remained China’s largest trade partner despite the slow down in the Chinese economy.

“The amount in imports from Africa to China declined but did not decline remarkably. “Moreover, the economic and trade cooperation between China and Africa is not only about trade but technical cooperation as well.

“China’s total investment volume in Africa last year increased by 100 times more in a short span of 10 years, which shows that cooperation between both parties is moving to a new level,” he said.