Fuel Scarcity: Osinbajo, Kachikwu Meet With Oil Marketers

Nigeria’s Vice President, Professor Yemi Osinbajo, and the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, have met with some major petroleum marketers over the issue of fuel scarcity in the country.

Dr Kachikwu said in a tweet that Monday’s meeting, which was ‘productive and collaborative’, was convened as part of efforts by the Federal Government to frontally provide the much-needed solutions to the lingering fuel availability challenges across the country.

The minister said that the government was very much aware of the difficulty Nigerians go through to get the scarce product but that it would soon be a thing of the past.

He informed the people that the government has mandated the Nigerian National Petroleum Corporation and other relevant agencies to ensure the states are flooded with the product.

“Whilst empathising with Nigerians for the needless pain and suffering that the current situation has sprung up, we expect that the fuel availability challenges evidenced by long queues will be completely eliminated, soonest.

“We are leaving no stone unturned as we continue to monitor the current fuel situation and collaboratively work with the NNPC and the Department of Petroleum Resources (DPR) to assiduously execute already communicated ministerial directives to maximally flood the market with products,” Kachikwu said.

He further thanked Nigerians for their understanding and support for the administration of President Muhammadu Buhari, adding that measures are being put in place to prevent a reoccurrence of such incident.

He said: “The bigger picture is to ensure that a repeat of the current challenge is never again experienced; I thank every Nigerian for the support even in the face of challenges. God bless you and I respectfully wish you a splendid holiday and celebration.”

In continuation of the field rounds in our bid to frontally provide much needed solutions to the lingering fuel availability challenges with the Vice President H. E @ProfOsinbajo, SAN, we engaged the Major Oil Marketers in a very productive and collaborative meeting. pic.twitter.com/DsGvkgFfQR

— EIK (@IbeKachikwu) December 25, 2017
Whilst empathizing with Nigerians for the needless pain and suffering that the current situation has sprung up, we expect that the fuel availability challenges evidenced by long queues will be completely eliminated, soonest. pic.twitter.com/9kVNfMzTMh
— EIK (@IbeKachikwu) December 25, 2017

We are leaving no stone unturned as we continue to monitor the current fuel situation and collaboratively work with @NNPCgroup and the Department of Petroleum Resources to assiduously execute already communicated ministerial directives to maximally flood the market with products. pic.twitter.com/ospL33o5V7
— EIK (@IbeKachikwu) December 25, 2017

$1.2bn Refineries’ Repair Contract not Awarded – Kachikwu

The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, on Thursday in Abuja explained that reports of concession of Port Harcourt to Oando and Agip companies were untrue .

Kachikwu said at a news briefing that ”a technical committee set up by the government to undertake the review and selection process is yet to submit its report”.

There had been reports that government had reached agreement with the firms following which the Senate asked that the contract be stopped.

According to the minister, what has been accomplished by the committee is coming up with a holistic investment figure enough to fix the nation’s three refineries.

”We have not selected any firm yet even though some firms have shown interests.

”We need about 1.2 billion dollars to repair and bring the three refineries of the Nigerian National Petroleum Corporation (NNPC) in Port Harcourt, Warri, and Kaduna, up to 100 per cent production level,” he said.

The minister said the cost of the project had been determined in terms of the extent of work required.

”The total cumulative amount is in the 1.1 billion dollars and 1.2 billion dollars category between all the refineries. And that of course does not include the pipelines.

”You have got to address the pipelines and that is something else that is being done,” he said.

He further explained that Nigeria spent about N4.74 trillion on importation of petrol in the past year which was 30 per cent of the total foreign exchange outlay of the Central Bank of Nigeria (CBN).

”The importation of petroleum products between January and December of last year amounted to about 20 million metric tonnes.

”A total amount of N3.4 trillion was spent, the consumption of FX from CBN was approximately 30 per cent of CBN total FX outlay, and the logistic costs of that importation was about N1.34 trillion within the same one year period.’ ‘

On domestic refining capacity, the minister said the nation produced six million litres out of a total consumption of about 35 million litres per day.

”In the midst of this sort of statistics, it was absolutely critical that we move in to try to end importation of products, improve our refineries and get them up to 100 per cent.

”We are looking for financing of the repair and upgrade of the refineries. We are not concessioning refineries, it is simply a financing package,” he said.

Kachikwu said the government would invite the original refineries builders for the three refineries to undertake the repairs but stressed that it had not selected any financier for the repairs.

”Once we identify those individuals and see how we can make contacts with those who built the refineries – Saipem in Warri; JGC in Port Harcourt; and Chiyoda in Kaduna, to ensure that we go back to them.’

He said such step was necessary ‘’because they (builders) have the designs, engineering outlay and upgrade capabilities, and in some cases, they have the access to spare part.

”If we are going to achieve this within the timeframe we gave, we are going to meet them and I think we have largely decided that those are the people we should use,” he stated.

The minister said the government would have to consider the overall capabilities of those interested in the process.

He also added that their business model would have to be tied into the current Direct Sales Direct Purchase (DSDP) of NNPC to be able to make profit, especially with consideration to the country’s downstream sector, which had not been deregulated.

”We haven’t reached there, and so anybody indicating that contracts have been given is wrong.

”In terms of who wins the financing awards, that is still work in progress. We have not received from the technical committee their final report on this.

”We need to review and accept and go to FEC for approval and the National Assembly before we proceed.

“There is an urgency in this sector that we need to address. We have begun engagements with the National Assembly and the process continues, but we need speed in all these,” he added.

NAN

Nigeria to Restore Oil Output Even as OPEC Weighs Extending Cuts

Nigeria will revive oil production this summer as it completes maintenance and repairs, and expects fellow OPEC members to continue to cut their output in the second half of the year, Oil Minister Emmanuel Kachikwu said.

Africa’s second-biggest producer will finish repairs on the Forcados pipeline by June and complete maintenance at the Bonga oilfield the following month, Kachikwu said in a Bloomberg Television interview. The country’s output slumped to 1.27 million barrels a day last month, the lowest in decades, according to data provided by the nation. It aims to reach 2.2 million barrels a day.

With production losses due to militant attacks, Nigeria had been exempt from output cuts by the Organization of Petroleum Exporting Countries. The nation will join the OPEC measure once it has fully restored output it’s lost, which could happen as early as October or November, and meanwhile expects the counterparts to extend the cuts to keep oil prices above $50 a barrel, Kachikwu said.

Nigeria to Restore Oil Output Even as OPEC Weighs Extending Cuts

by Alix Steel , Catherine Traywick , and Grant Smith
April 13, 2017, 4:17 PM GMT+1
Bonga, Forcados facilities will restart by July after work
OPEC must extend cutbacks to keep prices above $50 a barrel

The Agbami floating oil production, storage and offloading vessel in Nigeria Photographer: George Osodi/Bloomberg
Nigeria will revive oil production this summer as it completes maintenance and repairs, and expects fellow OPEC members to continue to cut their output in the second half of the year, Oil Minister Emmanuel Kachikwu said.

Africa’s second-biggest producer will finish repairs on the Forcados pipeline by June and complete maintenance at the Bonga oilfield the following month, Kachikwu said in a Bloomberg Television interview. The country’s output slumped to 1.27 million barrels a day last month, the lowest in decades, according to data provided by the nation. It aims to reach 2.2 million barrels a day.

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Nigeria’s Kachikwu Is Hoping to ‘Pump Up’ U.S. Engagement
Nigeria Oil Minister Emmanuel Ibe Kachikwu discusses outlook for the country’s output and OPEC supply cut extension
Daybreak: Americas.” (Source: Bloomberg) (Source: Bloomberg)
With production losses due to militant attacks, Nigeria had been exempt from output cuts by the Organization of Petroleum Exporting Countries. The nation will join the OPEC measure once it has fully restored output it’s lost, which could happen as early as October or November, and meanwhile expects the counterparts to extend the cuts to keep oil prices above $50 a barrel, Kachikwu said.

“I’m not sure we have an alternative, we’ve got to,” Kachikwu said. “There’s a lot of energy around a six-month extension,” which should be “easy” to agree when ministers meet in May.

Maintenance reduced Nigeria’s output in March by 250,000 barrels, he said. Having been spared from militant attacks for three months, the country’s focus for boosting output is shifting away from security threats toward fiscal issues, he said.

The country’s long-delayed Petroleum Industry Governance Bill, which seeks to reform how the industry is regulated and funded, will be presented to lawmakers for consideration later this month. Nigeria will also begin pay back a $5.1 billion debt owed to international companies including Exxon Mobil Corp. and Total SA this month.

Bloomberg