Oil & gas: Nigeria targets 2.8 million bpd, 60% oil imports reduction by 2019

•Launches 4-year plan to ‘ramp up production, reduce costs’ •Buhari assures of investments security, high ROI •Kachikwu targets $20bn revenue from private sector, stresses N/Delta security

President Buhari with R-L: Minister of State for Petroleum Resources Dr Ibe Kachikwu, Zamfara State Governor Abubakar Yari and Chairman House Committee on Petroleum Upstream Victor Nwokolo as he attends Public Presentation of the 7 Big Wins (Short and Medium Term Priorities to Grow Nigeria’s Oil and Gas Industry, 2015-2019) at the State House Conference Centre Abuja on Thursday.

Nigeria is targeting daily production of 2.8 million barrels of crude oil and 10bscfd of gas production by 2019.

The country will also reduce importation of petroleum products by 60 per cent in 2018 the country, and become net exporter of petroleum products and value added petrochemicals by 2019, the Minister of State, Petroleum Resources, Dr Ibe Kachikwu, said on Thursday.

To achieve this, Kachikwu said the ministry would partner with various stakeholders on “innovative thinking, new ideas, technology” to “enable us improve oil and gas production from our new, mature, and marginal fields, explore our frontier basins and improve our local refining capacity.

“We will leverage on our liberalised downstream environment to attract investment into our high value portfolio of products distribution and storage assets network.”

Kachikwu said this during a launch of a plan that would provide “stable and enabling oil and gas landscape with improved transparency, efficiency, stable investment climate, and a well protected environment.”

The roadmap, which highlighted short and medium term priorities to grow the country’s oil and gas sector between 2015 and 2019, included policy and regulation, targeted at “reviewing of old and moribund policies, gazetting new policies and entrenching robust fiscal instruments and regulations with key attention given to the passage of the Petroleum Industry Reform Bill.”

The policy document indicated that the ministry would ensure that adequate infrastructure is put in place to ramp up national crude oil production to a target of about 2.8 million barrels per day, while contributing positively in the area of gas to power by boosting gas production to 10bscfd by 2019 respectively.

The document also highlighted gas revolution through new infrastructure and gas terms that would encourage the roll out of a national blueprint for backbone gas pipeline and processing infrastructure that “will enable flexibility in supply delivery and provide a viable source of income for the country.”

Among the plan for improving oil production in the country is “Niger Delta and Security” which plans to “attract much needed investment and infrastructural development in the region as well as safeguard the environment”; as well as “transparency and efficiency” which aims to institute transparency and efficiency at all levels of operations to drive profitability and accountability in the necessary agencies.

“Our target is to ensure zero militancy in the area. This planned meeting shows the level of interest the president has to ensure peace in the area,” he said.

Kachikwu said the $10 billion investment is “not necessarily” going to come from the federal government, but rather from “oil companies, investors, individuals.”

Kachikwu said ongoing reform in the sector will “provide huge investment opportunities in infrastructure development, oil and gas facilities, operations, and maintenance across the oil and gas value chain.”

He added that “we will also unveil a set of enabling policies and regulations that will jumpstart our gas industry through the establishment of robust infrastructure, gas based industries – petrochemicals plants, fertilizer, methanol and LPG/ CNG programs.”

Kachikwu assured federal government would ensure that it finds every oil that was available in every part of Nigeria, with increased private sector participation, while it intended to raise $5 billion and $20 billion in the short and long term respectively for the Federal Government.

He further gave reasons why the country was not keen on privatising the refineries at the moment, saying the presidency and the Federal Economic Council (FEC) had agreed that the refineries should be restored to its optimum capacity and made to work efficiently, while other issues should be addressed to guide against selling the refineries as scraps.

“The feeling of the FEC and the President is that we should first get the refineries to be efficient before we talk about privatisation, otherwise, we will be selling scraps. In their present state, nobody is going to offer you serious money.  A huge amount of investment is going into this.

The plan, the 7 Big Wins to Grow the Nigerian Oil & Gas Industry, launched in Abuja on Thursday, would help Nigeria ramp up production, reduce costs, foster efficiency and attract investments in the oil and gas value chain, President Muhammadu Buhari said at the launch.

“Nigeria is ready and accessible for investments from all interested countries, individuals and partners. Let me assure you that your investments are secure in Nigeria and a high return on investment is assured.

“As important as it is to ensure that agriculture, solid minerals and other critical sectors of the economy are supported to grow and contribute more to the nation’s economy, we still need a virile and efficient oil & gas industry to take care of our foreign exchange requirements.

“This will help us improve oil and gas production, explore our frontier basins, improve our local refining capacity and above all build sustainable partnerships with the oil producing communities.

“If we are able to plug the leakages, and tighten loose systems that characterised this industry in the days of high oil prices, we are convinced that we can do even more with the little that we are getting at the moment than we did even in the time of plenty.”