Drop In Oil Production Damaging For Nigeria’s Economy, Says Kachikwu


Image result for ibe kachikwu

Minister Of State for Petroleum, Dr Ibe Kachikwu

…Lists strategies for economic recovery

Minister of State for Petroleum, Dr Ibe Kachikwu, has identified seven key implementation strategies to boost the petroleum industry and enhence export of refined products by 2019.
Kachikwu, who spoke at the Presidential Quarterly Business Forum between the Private Sector and the Economic Management Team (EMT) in Abuja on Monday, listed policy and regulation; business environment and investment drive; transparency and efficiency; stakeholder management and international coordination as of primary concerns of the ministry.
Represented by Mr Johnson Awoyemi,, the Senior Technical Adviser of the ministry, the Minister identified peace and security in the Niger Delta region as being crucial in the programme.
Others, according to him, include engaging in gas revolution as well as increasing refineries and local production capacity.
“Oil and gas will drive diversification but the drop in oil production to 1.56 billion barrels per day from the annual estimate of 2.2 billion barrels per day will negatively affect growth.’’
The Minister stressed the need to empower the Niger Delta region and ensure peace in the region by stopping militancy and enhancing the attainment of national aspirations in oil and gas production.
Kachikwu said that several companies in the sector are indebted in royalties to the tune of about four billion dollars. He said there was need for policies on oil, gas, downstream and fiscal reform, adding that the proposed petroleum industry bill (PIB) had become very imperative.
Kachikwu said there were challenges in the oil and gas sector which led to drop in the nation’s GDP growth from 6 per cent to 4 per cent, stressing that this had led to shortage of funds for providing critical infrastructure.
He explained that the 29 per cent decline in oil production has resulted in the loss of 700,000 million barrels per day.
Accordingly, there was 32 per cent decline in gas production from 8,000 million cubic feet per day to 5,500 million cubic feet.
He announced that 3,000 pipeline vandalism incidents were recorded from 2010 to 2015, while 643 million litres of petroleum products amounting to N51.28 billion was lost in 2015 alone.
The Minister explained that between January and June 2016, the ministry recorded 1,600 vandalism incidents in spite of efforts to boost local production and refining of products.
“Until we are able to locally refine what we produce, we won’t be able to go forward,” he said.
Kachikwu advised investors to embrace the ministry’s policy for creating modular refineries and asked them to come up with proposals.
He noted that some successes were recorded in the oil and gas sector since November 2015, including the elimination of subsidy payments which yielded about N15.4 billion monthly savings.
Kachikwu had started the liberalisation of downstream sector with 47 per cent reduction in PMS truck loads and signing of 80 billion dollar MOUs at the China Investors Roadshow in June 2016.
The Minister said that plans were on to increase oil production to 1.8 billion barrels per day by October and to two billion barrels by December.
Meanwhile, the Minister of Finance, Mrs Kemi Adeosun, said that the Federal Government so far has released N720 billion into the economy.
According to her, about N420 billion was released for capital projects, and additional N350 billion to ministries, departments and agencies would be released this week, while another N350 billion will be made available in November.
Adeosun said the administration was targeting real GDP growth in 2017, rapid infrastructure development to drive the economy as well as diversification and growth of non-oil sector. The Sun

One thought on “Drop In Oil Production Damaging For Nigeria’s Economy, Says Kachikwu

Leave a Reply