Nigeria and joint venture partners to invest in petroleum sector

Jul 27, 2001 02:00 AM

The Nigerian Federal Government and its joint venture partners are to invest $ 5 bn annually or $ 50 bn over the next 10 years in the petroleum sector, President Olusegun Obasanjo has disclosed. A large chunk of the investment is targeted at gas utilisation and commercialisation projects.
Obasanjo, who spoke in Lagos at the "Oil and Gas Investors' Forum" organised by the Anambra State Government said the priority for gas was a function of government's target of zero gas flare by 2008. The president, who was represented on the occasion by a deputy director in the Department of Petroleum Resources (DPR), Engr. Patrick Onwumere, added that the Federal Government is also working on the necessary framework that will govern the activities of the gas industry in its efforts to supply gas to industrial, commercial and residential users throughout the federation.
"Our crude oil reserves as at today, stands at 27 bn barrels, and we hope to raise it to 30 bn barrels by 2003 while expanding our production capacity to 3 mm bpd by same year. "Our reserve should reach 40 bn barrels by 2010 by which time we hope to produce almost 4 mm bpd of crude oil," Obasanjo said.

The President disclosed that the Federal Government has packaged incentives for both indigenous and foreign entrepreneurs to encourage them to participate actively in the oil sector, adding that these incentives range from tax exemptions to reduced investment tax allowances. He stressed that the Federal Government was therefore looking forward to a mass injection of capital by both indigenous and foreign sector, noting that the existing regulatory regimes that hinder competitiveness were gradually being dismantled.
"The Federal Government has therefore embarked on total liberalisation of the downstream sector, and the private sector is expected to play a significant role. In this direction, government has divested its equity holdings in major oil marketing companies.
"It is also putting in place the needed framework to encourageprivate sector participation in refining, distribution and marketing of petroleum and petrochemical products," Obasanjo affirmed. He therefore implored investors to be prepared to swing into action to utilise the windows of available business opportunities while reiterating government's commitment to provide the much-needed enabling environment for industries to thrive in the country.

In his address, the Anambra State Governor, Dr. Chinwoke Mbadinuju, disclosed the state's resolve to set up a medium sized refinery, an Independent Power Plant (IPP). Mbadinuju, who lamented the negative impact of the energy crisis to the rapid growth and industrialisation of the state noted that the recent power outage in the Abudu power plant in Edo State, which disrupted electricity supply to the eastern states has exposed the vulnerability of that part of the country.
The Governor noted that all the industries in these states, including Anambra were forced to shut down and in the process incurred losses estimated at hundreds of millions of naira. From available data, he stated that only 36 % of Nigerians have access to electricity from NEPA, adding that even if NEPA was to double its generation as planned, the rationing formula would still put the majority of Anambra residents in darkness. "Independent Power Production (IPP) is therefore a crucial part of the integrated industrial development scheme, which is being planned for the state," he said, adding that the independent power plant would run on natural gas.

Source: This Day
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