Oil, gas sector, key ways out of economic recession, Buhari – Gistdigest24 news

Oil, gas sector, key ways out of economic recession, Buhari - Gistdigest24 news


Oil, gas sector, key ways out of economic recession, Buhari – Gistdigest24 news

Despite the crash in the prices of crude oil in the international market, President Muhammadu Buhari, yesterday, stated the oil and gas industry still remains a critical panacea to Nigeria’s economic woes. Buhari-oil He said that though the country was diversifying its economy through agriculture, solid minerals amongst others, there was still need for a virile and efficient oil and gas industry to take care of our foreign exchange requirements.

The president spoke yesterday in Abuja during the launch of the Short and Medium Term Priorities to Grow Nigeria’s Oil and Gas Industry (2015 – 2019), tagged the ‘7BigWins’, a new initiative by the Ministry of Petroleum Resources.

He explained that the roadmap being created under this initiative reflects the vision and aspiration of his administration in the sector, adding that the petroleum industry remains critical to the Nigerian economy of today and the future, despite our current challenges. He stated: “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 remains 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.

“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.”

2.2mbd oil output by 2017

Speaking on the occasion, Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, said that Nigeria’s crude oil output would rise to 2.2 million in the first few days of 2017, adding that the Federal Government has addressed a number of funding issues which would see Nigeria’s crude oil output rise to three million barrels per day in the next couple of months. He further stated that the country would ensure that it find every oil that is available in every part of the country, with increased private sector participation, while it intends to raise $5 billion and $20 billion in the short and long term respectively, for the Federal Government.

Refineries not for sale now

Kachikwu also gave reasons why the country is not keen on privatizing the refineries at the moment, stating that the Presidency and the Federal Economic Council had agreed that the refineries should be restored to its optimum capacity and made to work efficiently, while other issues should be addressed to guide against selling the refineries as scraps.

NNPC corruption allegations

Kachikwu partly exonerated the Nigerian National Petroleum Corporation, NNPC, from the corruption toga in which it had been tagged, stating that most of the allegations against the corporation are overblown and based on lack of understanding of the workings of the oil sector. He said, “I think sometimes the corruption index in NNPC are overblown, because sometimes people do not understand the technicalities of what is going on and the short answer is corruption. But I do agree that there are all kinds of sleaze stories in the past, but if you look at the last one year and in the last 13 months, those have dramatically disappeared.

$10bn Niger Delta infrastructure fund

In addition, Kachikwu stated that the Federal Government is planning on setting up a fund in the region of $10 billion for the development of critical infrastructure in the Niger Delta and also for the growth of the region. “The whole idea is to set up a fund that is not tied to budgeting; find international organizations, identify their willingness to put in money into the Niger Delta; be able to negotiate with state governments some percentage of what they have to put into this fund; obviously, FG input, oil companies input,” he said.

Stripping states of 13% derivation proceeds

He also stated that the Federal Government is considering stripping states of some of the proceeds of the 13 per cent derivation funds, making sure that portions of the funds are used for the development of oil-producing communities. He said, “The biggest problem in the Niger Delta is that as you go from point to point, you really cannot see any infrastructural investment. The Presidency is also reviewing a proposal that we have given him to look at how the 13 per cent derivation is applied. “Right now it is a budgeting tool for state governments. We are going to be appealing to them to begin to put quite a bit of that into the core areas of the oil-producing communities, and not just to see it as a budgeting number.”


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