The Federal Government is seeking indigenous and foreign investors to revamp dilapidated infrastructure in nation’s oil and gas industry, Mr. Ibe Kachikwu, Minister of State for Petroleum Resources said Wednesday.
Kachikwu, in a podcast on ‘BigWin 7: International Energy Relations and Coordination,’ also noted that government’s focus was on investors coming in with equity financing, adding that the investors would be expected to develop a business model that makes sense for the country.
This, he explained, necessitated his strategic visits to International Oil Companies, IOCs, with the aim of galvanizing support and mobilizing funds for the Nigerian petroleum industry.
He said: “I embarked on strategic visits to the IOCs and the reason was simple: If we do all we want, in terms of the policy drives, in terms of the need to increase production, in terms of the need to increase infrastructure; but a large amount of those funds comes from abroad.
“We visited all of them in their headquarters, held meetings and aligned them to a lot of the initiatives we have. Initiatives in terms of gas expansion; initiative in terms of crude oil production stabilization; in terms of a new funding mechanism to deal with the cash call problems that we had and initiative with local content drive.”
Kachikwu noted that these travels and one-on-one interface helped placed Nigeria on the investment table of most chief executive officers globally.
He added that when investments were being considered, Nigeria was one of the countries chief executives could say they had spoken to the minister and were willing to provide the much-needed support.
“With all these, what can we do in terms of international collaborations? Quite a bit more. We need to get into the financing corridors and be able to find the funding to develop our infrastructure. As we move from a public sector driven oil sector model, private sector financing is key.
“We need to be able to find investors, who on the basis of equity investments can come in and massively change some of the dilapidated infrastructure that we see here and create a business model that makes sense for this country.
”We will like to see production go up, at cost that makes a lot of sense. We will like to hold conversations with a lot of people and be able to look at the Production Sharing Contract, PSC, terms and get the very best value for this country,” Kachikwu said.
He added that the Federal Government reassessed its membership of the Gas Exporting Countries Forum, GECF, which enabled it to align some of Nigeria’s gas policies, allowing it to bring out some of the international best standards to begin to attract very solid investment into the sector.
“One of the fallouts of this is the decision of the Nigerian LNG Limited now to take its 7th train and, therefore, increase substantially, the gas production in Nigeria; move Nigeria to about the second or third largest gas exporter in the world.
”That is a substantial move and it is a huge amount of investment and huge amount of investors’ confidence in this country,” he noted.
