The Oil and gas sector needs investment worth about $10 billion for four consecutive years in order to transform the sector.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu stated this while delivering his ministerial address at the ongoing 2017 Nigeria Oil and Gas Conference (NOG) in Abuja.
“For transformation to occur in the oil and gas sector, the sector would need investment worth about $10 billion dollars annually for a period of four years. The government will commence local refining of petroleum products before the end of year 2019.The government will also need to revisit and analyze policies that may engender the growth and investment in the oil and gas industry in Nigeria,” he said.
He listed some of the challenges facing the Nigerian oil and gas sector to include falling oil price, poor infrastructure, poor environment and pipeline vandalism in the Niger Delta region.
These factors according to him led to a turn down in exploration activities by over 30 percent between 2015 and 2016 in the country adding that the oil and gas industry lacks good infrastructure, rather deteriorating infrastructure that would require about 45 billion dollars to repair.
“We never invested in infrastructure, we never saved as a nation, most of the infrastructure we have today are infrastructures of old, and our pipelines have deteriorated about 40 to 50 years old, no replacement plans, nothing to fall back to, no investment, no infrastructure and massive expenditures. Imagine if subsidy had not been removed in the environment we find ourselves today; so when you look into the industry, whether it was infrastructure, saving culture and investment culture that we had, Nigeria simply just prepared for an environment of difficulty, environment of decline in output in this country,” he said.
The Minister stated the government would commence payment of Joint Venture (JV) cash arrears of year 2016 in the coming month, pleading that oil companies reduce cost in their operation.
However, he said the Federal Government is in partnership with key stakeholders in the sector to ensure that the Petroleum Industry Bill (PIB) records significant progress before the end of 2017.
Dr. Kachikwu further assured that the government would look into the issue of pipeline vandalism in the Niger Delta region with relevant stakeholders to ensure that year 2017 doesn’t record any significant loss.