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17

OPEC bulletin 5–7/17

C o n f e r e n c e N o t e s

Dr Emmanuel Ibe Kachikwu

Nigeria’s Minister of State for Petroleum Resources

D

r Emmanuel Ibe Kachikwu, Nigeria’sMinister of State

for Petroleum Resources, said he feels extremely

positive about the OPEC and non-OPEC talks which have

been taking place over the past months. “I think the

whole idea of getting both OPEC and non-OPEC countries

together was a fantastic idea,” he said. “We all pushed

for it, and the sheer momentum that has gathered and

what it has done for the industry has been unbelieva-

ble,” he said.

“More importantly, it’shelped forgeunity, even [among]

OPEC Members,” he said. “All in all, it’s been good.”

“I think the Secretariat has done an excellent job,

while taking on an additional workload,” Kachikwu said.

A year ago, he could not have foreseen the level of suc-

cess that the talks have reached today. “I didn’t think

we would get this sort of momentum and unity between

OPEC and non-OPEC countries that easily. But I always

felt cooperation was a solution. I always advocated for

it …. The more universality we can bring to this relation-

ship, the more stability we bring to the market — so I am

happy with what we have achieved so far.”

Regarding his country’s oil industry, Kachikwu

stated that investment is needed to maintain essential

work. Nigeria’s normal production level is about 2.2m

b/d and the government would like to raise it to 3m

b/d. “Just to get fields online and cap them will require

an average of about $10 billion per year in investments

over the next three to four years,” he noted.

“There are also some dedicated projects in the Bonga

oil field,” he said, adding that Italy’s Agip plans to spend

about $10bn, while Royal Dutch Shell is hoping to spend

$10–11bn on the field.

“We are fairly close to identifying dedicated invest-

ments upstream,” he said. “Downstream is a chal-

lenge. We need to [invest in our] refineries. [We] need

to do pipelines. We’ve estimated the infrastructure

gap in the midstream and downstream to be about

$30–40bn and that is one of the things we are going

to be looking at.” He further stated that some of the

required investment could come from Nigerians with

investment capabilities, rather than being restricted

to investors abroad.

Kachikwu commented on direct purchase agree-

ments, which were introduced last year, as well as associ-

ated crude-for-product exchanges, stating that refineries

aren’t working well and

are only producing about

10–15 per cent of the

country’s requirements,

withmost products being

imported. Facing this

problem, the Petroleum

Ministry has decided that

rather than have middle

men sell the country’s

products and [import fin-

ished products], it has

tried “to achieve synergy

by giving the crude to an

established refinery to

process it and bring it

back to us.” Doing this,

it has saved billions of

dollars in his first year as

Minister. “It’s worth the

effort,” he said.

Refining investment

However, this is not a sustainable, long-term solution.

“The refineries need to be repaired […] which we are

hoping to do by 2019–20. But over and above that, we

want those involved in this trading to begin to invest in

refineries,” he said. “I think it’s a shame that we are still

importing so much product. When the government came

in two years ago, that was a major concern for us.”

In the meantime, the sector has been stabilized and

fuel queues removed. He added that supplies are better,

but there is still a fundamental need to focus on local

demand.

During the Meeting of the Conference, back in his

country, the first part of the Petroleum Industry Bill was

passed by the Nigerian Senate. This was welcome news,

though Kachikwu added that there are several compo-

nents to the bill. “[The Senate] just passed the first one

today, so it’s a landmark achievement,” he said. It still

requires approval from the House of Representatives

and the President. “But it’s a long process [and] we have

worked collaboratively with the Senate. I am happy to

hear that it got passed today.”