Nigeria says it expects to get as much as $4 billion in investment facilities for oil industry infrastructure as a 40-member Chinese investment team arrives the country at the end of the month.
This is a fallout from the July road show in China where Nigeria signed a $75.6 billion Memorandum of Understanding in investment in the oil sector, the Minister of State for Petroleum Resources, Emmanuel Kachikwu, said after the Federal Executive Council meeting on Wednesday.
Briefing journalists alongside the Ministers of Information and Culture, Lai Mohammed; Interior, Abdurahman Danbazzau; and Power, Works and Housing, Babatunde Fashola, after the FEC meeting Mr. Kachikwu explained that the MOUs signed during the road show generally have a gestation period of about one year as both countries set up their teams on bilateral lines to look at specific areas of investment interests.
“That is still work in progress,” he said. “We are having a team of over 40 Chinese, members of some of those bodies about visiting Nigeria by the end of this month. We are also setting up a full inter-ministerial panel that will be deliberating with them for each of those sectoral investments.
“I will say that the target we had while going to China was to raise $40 billion which is the total cost of our infrastructural gap for the oil industry. We raised about $75.6 billion, $69 billion of which were NNPC and government related potential investments and loans and the rest directly to the private sector.
“If we get even 20 per cent of that, that will be a major achievement for us.
“I will say we have one year period to work on this, we expect that some will come earlier. There are some facility lines that are almost readily available, close to about $3 or $4 billion. But the investment packages will take us time.
“This is different from the pledges that were made when the President visited China which was an all African type front basis, this is completely separate,” the minister said.
The Nigerian National Petroleum Corporation, NNPC, had in July embarked on a road show to China seeking investments to bridge the infrastructure funding gaps in the Nigerian oil and gas sector.
The management of the country’s state oil company had subsequently announced the signing of MOUs with some Chinese companies worth over $50 billion for infrastructure development.
The corporation had in its statement listed companies involved in the deal to include China North Industries Corporation (NORINCO Group), China Cinda Asset Management Company Limited (CINDA), China National Offshore Oil Corporation (CNOOC), China Petroleum & Chemical Corporation/Addax petroleum (SINOPEC/ADDAX), International Chamber of Commerce/ China’s National Development and Reform Commission (ICC-NDRC), among others.
The council also approved the resuscitation of the National Council on Hydrocarbon, an ombudsman council that meets once a year to just review policies in the oil and gas sector.
The minister explained that the council is a gathering of people from the business, oil sector, oil communities and ministries that are directly or indirectly affected by the policies rolled out by the
“The criticality is that as we continue the dialogue we have been having with militants, creating such a fora enables anybody who has an interest in the area, to converge and develop the thinking process that will guide policies in this sector,” he said.
He said the Council also approved the hosting of an international flare reduction convergence meeting in Nigeria billed to hold on November 30 and December 1.
“We will use that as a chance to roll out efforts by the ministry to addressing the flare. You are aware Nigeria is next to Russia in terms of the highest (gas) flaring nation. Even though we have progressed positively to reduce 70 per cent of the flare, but the 30 per cent we still flare is about 10 per cent of the world’s flare, so is a huge amount of gas,” he added.
Mr. Kachikwu said he also briefed council on the outcome of the OPEC meetings where it was agreed that output oil levels be reduced by member, except Nigeria, in order to increase price.
Iran and Libya were also excluded from the deal.