Buhari presents 7-point plan for oil and gas industry

   

President Muhummadu Buhari on delivered details of his new economic policy for the oil and gas industry on Thursday. Called the Seven Big Wins, it forms part of a short to medium term strategy framework with to grow the sector.

This is even as he has said despite the crash in crude oil prices, the sector still remains a critical panacea to Nigeria’s economic woes.

The President, who is to meet with over 50 stakeholders from the Niger Delta comprising oil companies, representatives of oil producing communities among others on Tuesday said,  though the country was diversifying its economy through agriculture, solid minerals among others areas, there was still the need for a virile and efficient oil and gas industry to take care of its foreign exchange requirements.

The new initiative is to be executed under the Ministry of Petroleum Resources.

The Seven Big Wins that will revamp and revive the sector focuses on key areas that include : Niger Delta and Security, Policy and Regulation,‎ Business Environment and Investment Drive, Transparency and Efficiency, Stakeholder management and international coordination, Gas Revolution and Refineries and Local Production Capacity.

Buhari said that the roadmap reflected the vision and aspiration of his administration in the sector.

The President noted that despite his administration’s determination to diversify the economy, the oil and gas sector still remains a critical revenue point for the country despite the dip in product prices.

He stressed the need for the Ministry of Petroleum to deliver on the expectations contained in the roadmap.

“The Petroleum industry remains critical to the Nigerian economy of today and the future, despite our current challenges.

“The golden era of high oil prices may not be here now, but Oil and Gas resources still remain the most immediate and practical keys out of our present economic crisis.

“Oil and Gas still remain a critical enabler for the successful implementation of our budget as well as the source of funds for laying a strong foundation for a new and more diversified economy.

“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 Roadmap reflects the vision and aspiration of this Administration for this sector and I urge you all to deliver on the expectations contained in the Petroleum Industry Roadmap. This is a national imperative and a core thrust of our economic policy.”

Thanking the ministry for the initiative, Buhari spoke of the need for a new culture of transparency and efficiency in the petroleum industry.

He expressed regrets over the restiveness in the Niger-Delta, stating how it had overtly affected the oil production, disclosing that measures were being taken to restore normalcy in the region.

“Therefore, the task before the Ministry of Petroleum Resources is to maximize the potentials and opportunities across the whole range of the Oil and Gas industry to stimulate our economy in spite of the current challenges.

“To do this certainly requires creativity, innovation, technology and robust partnership amongst various stakeholders.

“There is also a dire need to instil a new culture of transparency and efficiency in the industry, streamline operations along best practices by championing and implementing strategic reforms at every layer of the industry.

“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 characterized 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.

“As you are aware, recent developments in the Niger Delta have temporarily limited our oil and gas production and supplies. However, let me reaffirm that, whatever challenges we are currently facing in the region, our resolve and capability to work with all stakeholders to restore normalcy will guarantee success.

“I congratulate the Honourable Minister of State Petroleum Resources and his staff for putting this together and the good work he has been doing in transforming the Oil and Gas Industry.

“I also acknowledge the importance of the public, the media, local and foreign investors and other critical stakeholders in the oil and gas industry and appeal for their support and cooperation as we seek to consolidate change in this very important sector of our nation”.

The Minister of state for Petroleum, Ibe Kachikwu, while giving a breakdown of the Big Wins said it was time for Nigeria to take drastic steps to fix the sector. The implementation of the Wins will increase government streams of incomes and ensure zero militancy in the Niger Delta as well as shutdowns by oil majors by mid 2017.

“Our target is to have an incident reduction by 90 percent by 2018 and to target zero militancy and shut down by middle of 2017. Whatever shutdown experienced by middle of next year we expect it to be production slippages and not militancy issues. We must resolve current militancy problems and bring back production to 2.2 million barrels per day. We are currently at 1.8 million. 

“We will like to begin the year once Exxon Mobil brings back their production this week with 2.2million barrels per day. But the reality is that 2.2 million barrels does not represent at all the capacity of this nation. We have the capacity to increase to three million barrels per day, the problem has been funding. We are working with the oil sector players to begin to find solutions to our cash call problems. We need to create stability incentive schemes, jobs and investment opportunities in the Niger Delta zone.”

He described the unveiling of the seven big wins as a defining moment for the country. He said in the business and investment drive, the government was looking to raise more funds through successful leverage on the nation’s assets.

“We are looking to chat new frontiers especially with the Lake Chad basin. My vision is to encourage private sector to go into Lake Chad basin and find oil. We are targeting to raise over $5 billion in short term funds for this government and over $20 billion in medium to long term funds. 

“We need to cut contractual times for average of two years to average of three to six months. We need to reduce government stronghold on the oil sector so that the private sector can flourish grow in leaps and bounds. We need to review our fiscal structure so that government is able to meet and participate in best practices all over the world”.

Kachikwu said for the oil refineries, government is targeting to  achieve 100 percent local refining capacity by 2020 and by 2018 our hope is to stop importation of petroleum product and we will be very aggressive with this.

“The President has approved a team led by the NNPC GMD to drive the it. We are going to be licensing private refineries to look at investing in private refinery.”

The 7 ‘Big Wins’ in detail:

‎Policy and Regulation: Reviewing of old and moribund policies, gazetting new policies and entranching robust fiscal instruments and regulations with key attention given to the passage of the Petroleum Industry Reform Bill.

Business Environment and Investment Drive:‎ The roadmap provides a workable plan which would ensure that adequate infrastructure is put in place to ramp up National crude oil production to 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.

Transparency and Efficiency: Restructuring and revamping of the parastatals by instituting transparency and efficiency of all levels ‎of operations to drive profitability and accountability.

Stakeholder management and international coordination: Deploying a potent communication strategy and building and maintaining robust relationships with our stakeholders (within and outside the petroleum producing community).

Gas Revolution: Gas revolution through new infrastructure and gas terms that would encourage the roll out of 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.

Refineries and Local Production Capacity: Upgrading of the nation’s refineries and increasing local production capacity with an objective to reduce importation of petroleum products by 60 per cent‎ in 2018 in the country, and by 2019‎ become a net exporter of petroleum products and value added petrochemicals.