FG Targets $4bn Chinese Investment To Bridge Oil, Gas Infrastructure Gap | Independent Newspapers Limited
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FG Targets $4bn Chinese Investment To Bridge Oil, Gas Infrastructure Gap

Posted: Oct 6, 2016 at 4:25 am   /   by   /   comments (0)



Charles Okonji


The Federal Government has said that as fallout from its July road show in China it was targeting about $4 billion in investment facilities for oil industry infrastructure.

Emmanuel Kachikwu, the Minister of State for Petroleum Resources, who disclosed this after the Federal Executive Council meeting on Wednesday, said that following this development, a 40-member Chinese investment team will arrive in Nigeria at the end of this month.

Kachikwu, while noting that the Federal Government in the July road show in China signed a $75.6 billion Memorandum of Understanding (MoU) in investment in the oil sector, explained that the MoUs generally had 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.

He said: “That is still work in progress. We are having a team of over 40 Chinese; members of some of those bodies are 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 percent 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,” he stressed.

The Nigerian National Petroleum Corporation (NNPC), when Kachikwu was the Group Managing Director of the corporation, 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.

NNPC, which announced that the signing of MoUs with some Chinese companies worth over $50 billion for infrastructure development, listed companies involved in the deal to include China North Industries Corporation (NORINCO Group) and China Cinda Asset Management Company Limited (CINDA).

Others are 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.

FEC had also approved the resuscitation of the National Council on Hydrocarbon (NCH), an ombudsman council that meets once a year to just review policies in the oil and gas sector.

The Minister of State for Petroleum disclosed that NCH would involve gathering of people from the business, oil sector, oil communities and ministries, which would directly or indirectly be affected by the policies rolled out by the petroleum ministry.

Kachikwu added: “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.

“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 percent of the flare, but the 30 percent we still flare is about 10 percent of the world’s flare, so is a huge amount of gas,” he added.