According to AllAfrica.com :
Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Engr. Funsho Kupolokun yesterday disclosed that the country’s National Strategic Fuel Reserves have depleted, a development which may lead to further delay in the resolution of the current fuel crisis in the country.
To relieve government of its current joint venture obligations, the NNPC may undertake capital market funding, Minister of Energy, Dr. Edmund Daukoru, has said.
Kupolokun, in his keynote address at the 7th Nigerian Oil and Gas conference yesterday, also disclosed that the Federal Government and major oil companies would have invested about $67.1 billion between 2005 and 2008 on various oil and gas projects.
Speaking on “Nigerian Oil and Gas Industry: Consoli-dating the Gains”, the NNPC boss noted that government, in the past, used to depend on the strategic fuel stock at Suleija, Niger State and other locations to meet up with demands, but that the lingering fuel crisis being witnessed in the country was sequel to the depletion of the strategic reserves.
“In recent times, government has had to fall back of the strategic fuel reserve at Suleija and other locations to meet demand. The long queues we are witnessing is as a result of the depletion of the strategic reserves”, he said.
Kupolokun expressed doubts that the Kaduna and Warri refineries were not likely to be back on stream before May or June, when he said, normalcy was likely to be restored and regretted that the corporation has been using the facilities of about six independent marketers for some time.
“As we all know, depending on the tanker drivers of the independent marketers to move products from Port Harcourt and Lagos to other parts of the country is bound to result in some problems, like the one we are currently experiencing, where tanker drivers have refused to lift products since last Thursday following a strike action they are embarking upon”, he said.
He pointed out that the situation could only improve if the refineries commence operation adding that he foresaw a situation in which the Niger Delta crisis would continue till after the 2007 polls.
Earlier, Energy Minister, Dr. Edmund Daukoru had stated that notwithstanding the various setbacks compounded by the protracted crisis in the Niger Delta, Nigerian oil and gas industry has witnessed tremendous achievements since its inception over 50 years ago.
He said about 47 new operators and investors that have come into operations in the industry, which has resulted in significant boost to the nation’s reserves from world class discoveries in deepwater acreages currently accounting for about 25 percent of Nigeria’s daily production.
According to him, by 1999, when the present administration came into power, the scale of arrears owed the joint venture partners had reached alarming proportions, close to $1 billion, a situation he disclosed had put the industry’s growth in jeopardy but which the current administration had cleared.
“Against the background of these funding initiatives, government set target achievements of 40 billion barrels reserves and four million barrels of oil per day production by 2010. Though the deadline is still some three years away, the gains made over the past seven years under this administration are quite apparent. Joint Venture (JV) reserves grew by some 23 per cent while Production Sharing Contract (PSC) reserves have literally doubled, with an average reserve appreciation of 32 per cent for both JV and PSC.
“These achievements notwithstanding, the negative impact of annual budget cuts on government equity funding of the ventures is likely to persist and thus jeopardise the ambitious growth program, consisdered both technically sound and economically desirable.
“To achieve this sustained funding, a variety of mechanisms are currently being explored, that will relieve government to a consisrable extent from this perennial burden.
“One of these mechanisms could be a complete migration towards contract funding. On the other hand, the NNPC could be capitalised to enable her attract loan funding or undertake capital market funding as was done by Statoil at the turn of the decade. This latter option would be fully in line with government policy of expanded private sector participation in the economy”, he said.
The minister who also lauded the Local content initiative of the present administration, pointing out that supply of goods and services were mainly from overseas such that the industry had little or no impact on linkage industries or on Ground Domestic Projects (GDP) growth generally.
He regretted that these gains have not impacted on the populations in the Niger Delta to the extent that is desired.
“This inadequacy, the challenges to infrastructure development in the difficult Niger Delta terrain, as well as other complicating factors have resulted in the current state of militancy which government, together with other state holders is doing its best to address squarely”, he said.
On gas utilization, he said with estimated reserve of 185 trillion standard cubic feet in almost equal proportion of associated and non-associated gas, Nigeria ranks as the eight in the world, but that past policy initiatives took little congnizance of this fact such that the country’s gas was more renowned for its environmental nuisance value than its economic potentials.
He disclosed that two NLG plants at Olokola and Brass respectively are at the formation stage while several gas-based industries including methanol, fertilizers and petrochemical plants are in the works.
He noted that the biggest beneficiary of the government initiative is the power industry which he said, has seen 21 independent power plants under construction in different parts of the country. These power plants, he said are expected to contribute over 7,000 MW of electricity to the national grid.
The minister further stated that the West African Gas Pipeline, when fully operational in 2007, will deliver about 500 MMSF of gas per day to the Republic of Benin, Togo and Ghana while two other trans-national gas transmission lines, Trans-Sahara Gas Pipeline and Nigeria-Equitorial Guinea gas Pipeline are under serious consideration.
- The crisis in Nigeria is one tough nut to crack…those who have idea how to solve their problems maybe can get Nobel Peace Prize? Let’s pray hard for them!!! Hope one day our countries do not suffer similar fate…
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