Oil sector: FG to raise $15bn from India by December

…Investment to cover refining, crude oil purchase, others

The Federal Government, yesterday, disclosed that it is eyeing a minimum investment of $15 billion from India by December 2016, for the Nigeria oil and gas industry.

Speaking during a three-day working visit to India, Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, stated that Nigeria is likely to sign a cash-raising oil deal with India for $1

5 billion by the end of this year, while the Indian oil ministry disclosed that Nigeria had requested an upfront payment.

Kachikwu said, “Nigeria has a bit of a cash flow problem right now. Our reserves are not as strong as we want them. The impact of that is the value of the naira is coming down. So what we are trying is to leverage on the assets we have to receive immediate cash.”

The initial $15 billion investments, according to Kachikwu, would be upfront payment and would be a critical condition for the terms between countries to be agreed to.

President Buhari

According to a statement by the Federal Ministry of Petroleum Resources, Kachikwu said the upfront payment would be “for crude purchase, to be repaid on the basis of firm Term Crude Contracts over some years and in consideration for collaborating in refining sector, exploration & Production (E&P) activities on government-to-government (G-to-G) basis by Indian Public Sector Undertaking (PSU) Companies, long term contracts for supply of crude to Indian PSU companies from Nigeria.

“It also includes the possibilities of executing City Gas Distribution (CGD) and Liquefied Petroleum Gas (LPG) infrastructure projects by Indian PSU companies in Nigeria.”

The statement further disclosed that between 2015 and present, India imported nearly 23.7 million metric tonnes of crude oil from Nigeria, representing almost 12 per cent of India’s overall imports, while over two million metric tonnes per annum of Liquefied Natural Gas, LNG, was imported by the country from Nigeria.

The Ministry, in a statement signed by its Director of Press, Mr. Idang Alibi, explained that both countries would sign a Memorandum of Understanding, MoU, between December 5 and 7, 2016, to facilitate investments by India in the Nigerian oil and gas sector in Term Contract.

It stated that it would also engender increased participation of Indian companies in the refining sector, oil and gas marketing sector, upstream sector, and also in the development of gas infrastructure and training of oil and gas personnel in Nigeria.

According to the statement, Kachikwu also had one-to-one meetings with top executives of Indian public sector oil and gas companies and also representatives of some private sector firms.

In addition, Indian Ministry of Petroleum and Natural Gas, in a statement released after one of the meetings, stated that India’s oil minister, Dharmendra Pradhan, held the discussions with Kachikwu, adding that the meeting centred on the potential in diversifying the engagement of the two countries in the hydrocarbon sector.

The statement noted that Kachikwu and Pradhan agreed to strengthen the existing cooperation between both countries in the oil and gas sector, and in particular to explore investment opportunities for Indian public and private sector companies in Nigeria.

The statement read, “Both Ministers noted the existing and significant engagement between the two countries in the hydrocarbon sector. During the meeting, Pradhan thanked Nigerian Minister for allocating term contracts to Indian public sector oil companies and requested Nigeria to extend similar long term contracts to them.

“Both Ministers acknowledged that Nigeria was one of the largest trading partners of India in Africa which is dominated by import of crude oil and gas from Nigeria.”