Yemisi Izuora/Ijeoma Agudosi
The Minister of State for Petroleum Resources, Ibe Kachikwu, has said that government would in the next five years clear the discounted $5.1 billion Cash-Call debt owed International Oil Companies (IOCs).
This assurance is coming as the Senate tuesday decided to invite the Minister to explain three oil and gas related deals worth $115 billion he signed with China and India on behalf of Nigeria
Under the Joint Venture Cash Call (JVC) debt, the federal government owed the IOCs, $6.8 billion but got a discount of $1.7 billion leaving a balance of $5.1 billion.
According to the minister, the agreement states that the payment from incremental oil production will not affect Nigeria’s budget production benchmark of 2.2 million barrels per day (mbpd).
“The first concession obviously is the fact that the country got a discount of 1.7 billion dollars, and that is going to be paid over a period of five years.
“It will be paid from incremental volume of production and so we are not lynching into our 2.2mbpd to be able to pay for that.
“I think literally when you look at it, it almost translates into fiscals of N8 billion in savings for the government which is very good,” he said while speaking to newsmen after declaring open the National Council on Hydrocarbons in Abuja.
He explained that the responsibilities of the newly-inaugurated council would be advisory, adding that the council would act as a fact and ideas gathering team where all stakeholders: military, traditional rulers and ordinary Nigerians would contribute to the policy-making processes of the region.
The minister also inaugurated the newly-constituted Boards of the Petroleum Products Pricing Regulatory Authority (PPPRA), Petroleum Equalization Fund (Management) Board, PEF, and the Petroleum Training Institute (PTI).
Speaking at the inauguration ceremony he said the boards were formed at a time when the global petroleum industry was witnessing a downturn in fortunes.
Kachikwu said the composition of the boards was made up of selected individuals versed in experience and knowledge to guide the three parastatals into harnessing their potentials and fulfilling the nation’s expectations.
“For PPPRA, the expectation of the board is to provide the necessary stairs and guidance to the management on ensuring the maintenance of national petroleum products sufficiency and ensure the growth of the petroleum products strategic reserves.
“For PEF, the expectation from the members of the board is for them to ensure that the automated product tracking system from depots to stations is completed nationwide and every molecule of petroleum product is tracked to the retail station.
“For PTI, the expectation from the members of the board is for them to superintend the transformation of PTI to world class oil and gas training institute.
“Institutes that run commercially viable courses and grow the number of high value clients within the industry and make it a cynosure institution in the continent.’’
Meanwhile, Kachikwu is expected to explain to the Senate three oil and gas related deals worth $115 billion he signed with China and India on behalf of Nigeria.
Adopting a motion sponsored by Senator Clifford Ordia (APC, Edo Central), the Senate specifically resolved to seek detailed explanation from the minister on the $15 billion Memorandum of Understanding (MoU) with the Indian government in the oil and gas sector. The minister is also expected to explain details of the over $80 billion MoU he signed with Chinese firms in the same sector.
After exhaustive deliberation, the upper chamber said the minister had to appear before its joint committee on Petroleum Upstream, Gas and Foreign Affairs, to proffer detailed explanation on the subject matter of each of the MoU signed in China, and the proposed MoU with India, and the anticipated impact on the country’s economy.
It noted: “Besides these MoU for $80 billion investments, the two largest oil companies in China, Sinopec and CNOOC, signed investment MoU with the Minister of State for Petroleum Resources committing the companies to further investments in Nigeria’s upstream oil sub-sector to the tune of $20 billion.”
Ordia, in his lead debate, drew the attention of the Senate to the fact that the Minister of State for Petroleum negotiated a $15 billion investment with India where the Indian government would make an upfront payment to Nigeria for crude oil purchase.
The lawmaker said the two countries had agreed to sign an MoU to facilitate investments by India in the Nigerian oil and gas sector and in areas such as refining, oil and gas marketing, upstream ventures, development of gas infrastructure and the training of oil and gas personnel in the country.
Senate Leader, Mohammed Ali Ndume, said it was important to know whether the minister had the power to endorse any MoU involving billions of dollars without the participation and endorsement of the National Assembly.
Senator Abdullahi Adamu explained that what the minister did was “mere intention that has not matured.” He said that when the deal matures, the National Assembly would be brought in.
Senate President, Abubakar Bukola Saraki, thanked movers of the motion for drawing the attention of the Senate to the matter. He said the essence of the motion was to ensure transparency in a matter that involved future investments in the oil and gas sector.