By the year 2019, Nigeria is not only aiming to end fuel importation but to becoming a net exporter of the product, the Group Managing Director of the Nigerian Petroleum Corporation (NNPC), Dr Maikanti K. Baru, has said.
Speaking at the 7th OPEC International Seminar in Vienna, Austria, Baru told the participants that the narratives about Nigeria are fast changing since the beginning of the present administration in the country.
He said: “Our goal to become a net exporter of refined products by year 2019 is on course. There are ongoing discussions to revamp all the four (4) existing local refineries utilizing private capital in the form of a contractor financing model.
“This represents a shift in our investment model and serves as a springboard for redefining the commercial framework for midstream investment in Nigeria.”
The country, he further said, has provided stable environment and is changing its policy directions to guarantee safety of investments adding that a lot of investors have already taken advantage of that.
He said following the recent events and turbulence experienced in terms of the oil price cycle, supply driven glut in the oil market, world economic growth, the uncertainties regarding the future of oil, the fiscal imbalance experienced by OPEC member nations and particularly our domestic experience in Nigeria, investment in the industry becomes a critical topic for discussion.
However, the effort put in place by the current administration has helped attract investors in the downstream oil sector and upstream as well.
On the gas sector, Baru said “Gas supply to the domestic market has tripled from 500mmscf/d in 2010 to about 1500mmscf/d currently. We have completed and commissioned almost 600km of new gas pipelines thereby connecting all existing power plants to permanent gas supply pipeline.”
“The recently signed $2.8bn, 614Km Ajaokuta-Abuja-Kaduna-Kano (AKK) pipeline project is a demonstration of commitment to investing in local gas development,” Buru stated.
Meanwhile, the Minister of state for Petroleum Resources, Emmanuel Ibe Kachikwu yesterday at the event expressed concern that the environment is still not ripe for supply increment.
Thus, Nigeria is not in support of supplying more crude oil to the global market, the decision push by Saudi Arabia to help reduce higher oil prices.
OPEC and Non-OPEC members are currently meeting in Vienna, Austria, to decide either to increase oil supply or to continue with the production cut agreement reached in 2016.
Key leaders in the alliance- Saudi Arabia and the Russia which play major role in the Declaration of Cooperation that help stablises the oil industry in 2016 have all indicated the need for increase in supply of oil in order to avoid shortages.
Crude oil is on the upward trend since 2016 when the Organization of Petroleum Exporting Countries (OPEC) partnered other producers to reduce about 1.8 million.
Speaking to Journalists ahead of the Group meeting taking place today, Kachikwu said the oil prices are still on the downward trend.
“Coming here when the prices are $80/barrel, I would be very supportive of that (increment) but coming here when the prices are $62 or $63 per barrel, it means that they (prices) are potentially still shrinking.”
“The Minister of Saudi Arabia, Khalil al Falih, is saying there is a deficit of 1.8 million barrel daily in supply, I don’t think those numbers are right. I believe that they are over inflated”.
Iran is leading in opposing the increase in the supply of oil by member countries, suggesting that the market is still rebalancing.
Some major consumers of oil like United States of America and India are concern about the rising price of crude oil in the global market.
Saudi Arabia and some producers are also trying to avoid higher prices that can attract shale oil producers back to the market.
However, the geopolitical tension between Iran and US is likely to reduce the supply in the market after the withdrawal of the nuclear deal with the former.