Nigeria no longer has resources to fund oil industry, FG laments
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| Kachikwu Ibe, Ministesr of State for Petroleum Resource |
The Federal Government, Thursday, stated that the country no longer
have the resources to fund the country’s oil and gas industry, and is
therefore, considering and developing new models of financing for the
industry in the days ahead.
Speaking at a town hall meeting in Abuja, the Minister of State for
Petroleum Resources, Mr. Ibe Kachikwu, also stated that in January 2016,
the final decision on the fate of the country’s refineries would likely
be made, while it had also concluded arrangement to adopt a price
modulation mechanism that would see it setting a price ceiling of
between N87 and N97 per litre for Premium Motor Spirit, PMS, also known
as petrol.
Kachikwu, who doubles as the Group Managing Director of the Nigerian
National Petroleum Corporation, NNPC, also disclosed that he has
received the Presidency’s approval to commence the final phase of the
restructuring of the NNPC, which would see the Corporation unbundled
into four components, while about 1,100 of NNPC Headquarters’ staff
would be disengaged.
Commenting on the issue of the paucity of funds, Kachikwu said,
“Financing is going to be a key component of our goal, because new
models of financing would have to emerge. The country does not have the
sort of resources to continue to fund the oil industry. As we go
upstream, we are going to begin to see a lot of innovative financing
mechanism to provide funding for the oil industry.
“My dream, if I achieve it, is that by the end of 2016, we would
completely exit cash calls and be able to find our funds one way to help
support our business and get a lot more autonomy in terms of running
the industry and report, basically, profit to the Federal Government.”
He added that the unbundling process would see the NNPC broken down
into four key components, namely: the upstream company, downstream
company, the midstream company, which is gas and power marketing, and
the refining group holding company.
He further stated that one of the major restructuring efforts would
be in making the Headquarter operations cost effective, hence, about
more than half of its 2,200 core Headquarter staff would be whittled
down, with a lot of the affected staff assigned to the subsidiaries to
help make the units more efficient and profitable.
Source: Vanguard
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