Dr. Ibe Kachikwu |
The Federal Government on Monday announced that it had
commenced discussions with illegal refiners of crude oil in order to have them
work as duly recognised modular refinery operators.
It also stated that it would ensure that militancy in the
Niger Delta ended by the end of this year, adding that it would sustain its
engagements with stakeholders in the region in that respect.
The Minister of State for Petroleum Resources, Dr. Ibe
Kachikwu, disclosed this at the 10th Nigerian Association for Energy
Economics/International Association for Energy Economics Conference in Abuja.
The theme for this year’s NAEE/IAEE conference was, ‘Energy,
Economy and the Environment: The Interplay of Technology, Economics and Public
Policy’.
Kachikwu, who was represented by the Executive Secretary of
the Petroleum Technology Development Fund, Dr. Bello Gusau, said the Federal
Government was working out how to involve illegal refiners in the new modular
refinery scheme.
He stated, “In the past two weeks, we have opened
discussions with some of these refiners and government is assiduously working
to ensure that this initiative is carefully implemented without polluting the
environment.
“This will not only provide legal jobs and sources of income
for the populace, but will also contribute to our national policy initiative
target.”
The minister explained that the ministry’s focus was on
seven key initiatives and outlined them to include the introduction of new
policies that would drive the growth of the oil and gas sector.
Kachikwu said, “Number two is enabling the business
environment and attracting investors. Thirdly, unleashing investment options to
support forex. Number four is to improve our domestic capacity for local
petroleum products’ production and attaining self-sufficiency by 2018.
“Number five is to sustain engagements with oil-producing
communities and attain zero militancy in the Niger Delta region by the end of
the year 2017. The sixth is to increase efficiency in the industry and automate
business processes to account for every drop of oil that is produced in the
country.”
He noted that the last key focus area of his ministry was to
adopt a sustainable stakeholder management framework that would address the
various issues and circumstances in the sector.
The minister added, “Our engagements in the Niger Delta is
already yielding very significant results with the absence of any major
incident on our facilities.
“A comprehensive and holistic development is currently being
worked out with all stakeholders and government parastatals, including the
Ministry of Petroleum Resources, Ministry of Niger Delta, the Niger Delta
Development Commission, the Amnesty Office and the various state governments.”
Kachikwu further stated that the first instalment for the
payment of the cash call arrears by the Federal Government to international oil
companies as agreed between both parties would be done by the end of this
month.
He, however, did not state the amount to be paid as the
first instalment of the over $5bn debt owed the IOCs by the Federal Government.
Earlier in his address, the President, NAEE, Prof. Wumi
Iledare, lauded the Federal Government’s cash call exit agreement, but cautioned
that plans to fund the Joint Venture cash calls should be reviewed.
He said, “Of course, I hasten to suggest the new attempt to
fund the JV cash calls should be reviewed periodically within the context of
the overall goal.
“Perhaps a pseudo-Production Sharing Contract, or at best a
form of overriding royalty funding arrangement is worthy of consideration in
order to retain a participatory interest in the JV agreements without the
obligation of cash call for energy security reason.
“What this means for the economic metrics and the
government’s take requires a review of the fiscal terms such as royalty rate
and capital cost recovery mechanism.”
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