BusinessDay 11 Dec 2017

24 BUSINESS DAY C002D5556 Monday 11 December 2017
EXCELLENCE IN PUBLIC SERVICE AWARDS
2-year stewardship in the Nigerian Oil and Gas Sector
Since the appointment of
Emmanuel Ibe Kachikwu in
August 2015 by the administration
of His Excellency,
President Muhammadu
Buhari, Kachikwu has brought on
board a new approach that is aimed
at entrenching transparency, integrity
and probity in running the affairs of
the Ministry of Petroleum Resources
and in extension the nation’s Oil
and Gas sector. This approach has
yielded dividends in the number of
key achievements recorded within the
short period of 2 years under review.
These achievements include:
1. New Strategy for Funding the
Joint Venture Cash Call
Ibe Kachikwu tackled the issue of
underfunding of the sector which led
to huge cash call arrears and poor
investment which was the bane of the
oil industry when this Administration
came on board. In order to relieve
the huge burden of funding the
cash call obligations of our Joint Venture
operations, sustainable alternative
funding option for the cash call
obligations of the Nigerian National
Petroleum Corporation (NNPC) under
the Joint Venture Agreement (JVA) on
Petroleum Production was developed
and is currently being implemented.
On behalf of the Ministry of Petroleum
Resources and the NNPC, he led
the negotiations with the International
Oil Companies and successfully secured
a discount of 25% from each JV
Partner on the pre-2016 Cash Call Arrears.
This resulted in a final settlement
in the sum of US$5.1 billion payable
from incremental production from the
JV assets over a five-year tenor without
any interest charges during the repayment
period.
2. Liberalisation of the Downstream
Sector
This Administration met a huge
debt of subsidy payments and a struggling
downstream sector. Since coming
on board, the administration has
opened up the downstream sector to
private players, private investment and
diversification of products sourcing
through the introduction of the Price
Modulation Mechanism (PMM), and
subsequently, the Appropriate Pricing
Framework (APF) and liberalisation
in 2016.
These policies have successfully
reignited the commercial vibrancy of
the downstream sector and led to the
total elimination of petroleum products
subsidy, eliminated fuel scarcity;
long queues at filling stations, products
adulteration and diversion, and profiteering
that characterized the sector
and plagued the nation in the past.
3. Niger Delta Security
The Honourable Minister of State in
the past year has passionately pursued
the entrenchment of peace and stability
in the Niger Delta, which was plagued
by militancy and impacted negatively
on the nation’s crude oil production
and adversely affected the economy.
He instituted a sector wide and collaborative
intervention which has led
to substantial progress recorded in the
dialogue with Niger Delta communities
and leaders so that security and safety
could be restored permanently, in the
region. Steps that he midwifed include:
• Facilitating the first all-inclusive
meeting with Niger Delta leaders
and representatives hosted by President
Muhammadu Buhari in November 2016
• Engagements led by the Acting
President with host Communities in all
the Oil producing States to ensure security
and protection of infrastructure as
well as development of the Niger Delta
region.
• Engagement with IOCs to take
more responsibility for infrastructure
security.
The successes recorded include a
near zero militancy in the region since
the beginning of 2017 and also a substantial
increase in the daily crude oil
production recorded by the country
when compared to the same time last
year (i.e. in 2016).
4. Successes on the International
Energy Front
The global nature of the oil and gas
industry necessitated the emphasis
placed by Nigeria on her international
linkages as a core part of the diplomatic
agenda for 2016 and transiting
into 2017. Ibe Kachikwu has brought
to bear his over 30 years of experience
and influence in the International Oil
and Gas industry in ensuring the Nigeria’s
perception in the International
Energy circles are enhanced. Some
Emmanuel Ibe Kachikwu
Minister of State for Petroleum Resources
of the achievements recorded in the
International scene so far include the
following:
• Successful handover of the
Presidency of four key international
energy organisations namely:
- The Gas Exporting Countries
Forum (GECF)
- Organisation of Petroleum Exporting
Countries (OPEC);
- African Petroleum Producers
Association (APPA); and
- West African Gas Pipeline Authority
(WAGPA).
• Playing a key role in the negotiations
that led to the successful selection
of Mohammed Sanusi Barkindo of
Nigeria as the Secretary -General of the
OPEC.
• Successful rallying of OPEC
and Non-OPEC members to discuss
stabilisation of the global oil market in
Doha and in Algiers, which resulted in
an agreement to freeze oil production at
the 171st OPEC Ministerial conference
in Vienna. Nigeria successfully negotiated
an exemption from the 600,000
barrels/day production cut. The agreement
to extend the production freeze
deal was subsequently extended at the
172nd OPEC Ministerial conference /
2nd OPEC and Non-OPEC Ministerial
conference in Vienna. Kachikwu once
again negotiated the deal to once again
exempt Nigeria from the production cut
deal.
5. Launch and Implementation of
the Seven (7) Big Wins – The Nigerian
Petroleum Roadmap
The continuous effort being put in by
the DEmmanuel Ibe Kachikwu led the
Ministry of Petroleum Resources in the
development of the 7 Big Wins (Short
and Medium Term Priorities to grow
Nigeria’s Oil and Gas Industry - 2015-
2019). The 7 Big Wins was launched by
President Muhammadu Buhari, GCFR
on 27th October, 2016 and this underscores
the recognition of the critical role
of oil and gas in the development of the
Nigerian economy.
There are seven major areas of focus
under the 7 Big Wins and the Ministry
has commenced recording achievements
in a number of critical areas. The
key focus areas are:
1. Policy and Regulation: National
Oil Policy, National Gas policy, Fiscal
Reform Policy, Petroleum Industry
Reform Bill.
So far a New Oil policy, New Gas policy
and a New Fiscal Policy have been
developed. The National Gas Policy
and Petroleum Policy were recently approved
by the Federal Executive Council
and are awaiting gazetting, while the
Fiscal Policy are awaiting the approval
of the Federal Executive Council.
2. Business Environment and Investment
Drive: The implementation of
this aspect of the roadmap is presently
yielding results in the development of
accelerated Income Streams and attracting
much needed investments in
the Upstream, Midstream and Downstream.
3. Gas Revolution: The implementation
of this Big Win encompasses key
activities in Gas Infrastructure Development,
Gas Revolution Projects,
Promotion of Domestic Utilization
of LPG and CNG, Reduction of Gas
Flaring, Gas Commercial Framework
Implementation.
4. Refineries and Local Production
Capacity: Comprehensive rehabilitation
and revamp of existing refineries
is a key part of the plan being driven by
the Ministry of Petroleum Resources.
The Ministry’s objective is to ensure
that Nigeria stops total importation of
petroleum products by 2019. Expansion
of domestic refining capacity (Co-location,
green field, modular refineries)
would also be given top priority within
the next two years.
5. Niger Delta and Security: The key
components of the 5th Big Win include:
Environment and Security, Infrastructure
Interconnection, Capacity Building
and Economic Empowerment.
6. Transparency and Efficiency: Capacity
Building, Institutional Strengthening
and Governance Model, ICT and
Automation, Performance Management
make up the key aspects of the
6th Big Win being implemented by the
Ministry of Petroleum Resources.
7. Stakeholder Management and
International Coordination: Under this
Big Win, stakeholder relationship building
and management, international
energy relations and bilateral cooperation
will feature prominently in order to
further bolster Nigeria’s influence in the
International energy circles.