The Minister of State for Petroleum
Resources, Dr. Ibe Kachikwu, has signed Memorandums of Understanding
(MoUs) with several Chinese firms for over $80 billion new investments,
spanning five years, in the oil and gas industry covering pipelines,
refineries, gas and power, facility refurbishments and upstream
financing.
Speaking exclusively to THISDAY
yesterday from Beijing, China, Kachikwu said the agreements had been
executed during the three-day roadshow in the Asian country to attract
investments to Nigeria’s oil and gas sector.
The objective, he said, is to bridge the infrastructure funding gaps in the Nigerian oil and gas sector.
He said: “I can confirm that we had a
successful outing and finally raised investment commitments and signed
MoUs worth $80 billion.
“Out of this, $10 billion approximately
was raised on the sides with our steer and push for two Nigerian
companies – Delta Tek and Salvic Petroleum – while the balance of $70
billion includes MoUs signed by investors and financiers for projects
with the Nigerian National Petroleum Corporation (NNPC).”
Salvic Petroleum is a company founded
and chaired by Dr. ABC Orjiako, who is also the Chairman of foremost
Nigerian oil independent, Seplat Petroleum Plc.
Kachikwu also revealed that other than
the agreements executed for investments totalling $80 billion, he also
got commitments from Sinopec and China National Offshore Oil Corporation
(CNOOC) to commit to further investments in Nigeria’s upstream oil
sub-sector to the tune of $20 billion, which would be concluded in the
next few months.
This, he said, would effectively bring
the total amount of prospective investments by Chinese firms over a
five-year period to over $100 billion.
“Outside these (MoUs for $80 billion
investments), the two largest oil companies in China, Sinopec and CNOOC,
signed investment MoUs agreeing to announce after further discussions
on major investment increases in the Nigerian oil and gas in the next
few months.
“Given the areas of focus of these two
companies, we do not expect that investment to be less than $20 billion.
The net effect of these and other agreements in principle reached with
investor interest in China on this roadshow will potentially provide
investment funds for Nigerian oil and gas of over $100 billion over the
next five years.
“These investments cover every facet of
Nigeria’s oil and gas sector – upstream, pipelines, downstream, gas and
power, modular refining in the creeks, engineering services, etc.
“It has been a fantastic outing and if
we can follow through on all these, it will change the face of Nigeria’s
oil and gas forever. This will bring hope even to the Niger Delta and
is the single biggest amount of MoUs signed on investment in any third
world country in a roadshow,” he said.
The minister informed THISDAY that his
ministry and NNPC would work round the clock over the next few months to
perfect all the documents and meet all the conditions precedent to draw
down on the commitments made by the Chinese firms.
“We will work round the clock to meet
the conditions precedent to draw down and make these investments a
reality. Of course, the federal government’s approval on certain
commitments will be required as these involve sovereign guarantees.
“But the number of projects that require
sovereign guarantees are very limited, as most of them are build and
operate projects such as the pipelines and refineries, which are
attractive prospects for the Chinese firms that have expressed interest
in coming to Nigeria.”
He added that unlike the
oil-for-infrastructure deals with Chinese, Korean and Indian firms
entered into by the Olusegun Obasanjo administration, but all went burst
due to the federal government’s inability to meet its own side of the
bargain, the projects would not be paid for with oil, adding that the
returns on investments made by the Chinese would come from the projects.
Also speaking to THISDAY yesterday, an
official in the petroleum ministry said Kachikwu signed the MoUs with
companies that included China North Industries Corporation (NORINCO),
CINDA, CNOOC, Chem China and Sinopec/Addax and ICC-NDRC, among others.
He said: “The huge success of the
roadshow leveraged on the minister’s 30 years experience and contacts in
the oil and gas industry, as well as President Muhammadu Buhari’s
leadership and support.”
He added that the roadshow was a fallout
of two months of planning by officials of NNPC and the petroleum
ministry that targeted investment meetings with 38 Chinese firms.
“Other roadshows to India and the Gulf states are planned by Dr. Kachikwu for July and August should there be a need for this.
“This show of support reflects the
growing international confidence in Nigeria’s oil and gas sector
following major reforms over the last seven months and belief in the
government and integrity of President Buhari by foreign governments and
investors.”
Following THISDAY’s enquiries, a
statement provided by NNPC also said: “The Nigerian National Petroleum
Corporation wishes to announce the recent landmark strides the
corporation has achieved in its bid to bridge the infrastructure funding
gaps in the Nigerian oil and gas sector.
“This comes in the form of a first of
its kind roadshow in China where memorandums of understanding (MOUs)
worth over $80 billion to be spent on investments in oil and gas
infrastructure – pipelines, refineries, power, facility refurbishments
and upstream – have been signed with Chinese companies.
“Dr. Kachikwu, while speaking during the
plenary of a special Investors’ Roundtable which had in attendance over
300 Chinese and Nigerian businessmen and investors with a key focus on
the oil and gas sector, reiterated that the roadshow was organised as a
follow up to the earlier working visit of President Muhammadu Buhari to
China in April, 2016.
“He further commended the efforts and
resolve of the president whose steer and support in ensuring that there
is a marked transformation of the oil and gas industry has inspired the
management to work towards institutionalising of focus, accountability,
commitment and transparency at the corporation.”
NNPC added that the International
Cooperation Commission (ICC) of the National Development and Reform
Commission (NDRC), in charge of implementing cooperation between the
Chinese government, foreign governments and organisations, had committed
to developing an overarching master plan for the Nigerian oil and gas
sector that would include a detailed feasibility study of the current
status of existing infrastructure in the industry.
“They will also develop bankable
projects that would attract Chinese investors on this
government-to-government platform. This initiative would move us to a
much more profitable and efficient state. The master plan would form the
basis of massive inflow of further investment from Chinese companies
into the sector.
“At the end of the plenary, Dr. Kachikwu
expressed his gratitude to the Chinese government and investors for the
show of support which reflects the growing international confidence in
Nigeria’s oil and gas sector following the major reforms that have been
overseen under his leadership as both Group Managing Director of NNPC
and Minister of State, Petroleum Resources over the last seven months,
and also the belief in the government and integrity of President Buhari
by foreign governments and investors.
“Dr. Kachikwu further mentioned that the
China roadshow is the first of many investor roadshows intended for
raising funds to support the Oil and Gas Infrastructure Roadmap.
Roadshows have been slated for India and the Gulf states,” NNPC said.
Culled from Thisday
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