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Nigeria unveils new national oil policy

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Nigeria to stop fuel importation by 2019, Kachikwu says

The Nigerian Petroleum Policy, which is aimed at improving efficiency in the oil industry, was on Wednesday approved at The Federal Executive Council (FEC) meeting presided over by Acting President Yemi Osinbajo.

Ibe Kachikwu, Minister of State for Petroleum Resources, disclosed this to State House correspondents at the end of the council’s meeting inside the Presidential Villa, Abuja.

He said that the approval of the policy was coming about three weeks after the National Gas Policy was also considered and approved.

Kachikwu said that if well executed, the document would fundamentally drive the change process in the oil and gas industry that started in 2015 to its logical conclusion in the following years.

Read also: SPENDTHRIFT! Nigeria blows $1tn in 37years with little to show

He stated, “Today’s policy focused on oil and the imperative needed to change the policy in the oil sector. It dealt with certain fundamentals; we are already pursuing some of the policy. We are working assiduously to exit the importation of fuel in 2019 and capture the cash call change we have done, which enables the sector to fund itself through incremental volumes.

“It captures the reorganisation in the NNPC for efficiency and enables accountability. It captures the issues in the Niger Delta and what we need to do as a government to focus on stability and consistency in the sector.

“It is a very comprehensive 100-page document that deals with all aspects in the industry. The last time this was done was in 2007 and it has been 10 years and you are aware that the dynamics of the oil industry has changed dramatically.”

Kachikwu added that, “Apart from the fact of fluidity in pricing and uncertainty in terms of the price regime in crude, we are pushing for a refining processing environment and move away from exporting as it were to refining petroleum products. That is one change you will see.

“Secondly, how we sell our crude is going to be looked at. There is a lot of geographical market we need to look at long-term contracting and sales as opposed to the systemic contracting we have been doing.”

The minister stated that as part of efforts to end fuel importation by 2019, he currently chairs a steering committee, while there is a technical committee team already set up and headed by the Chief Operating Officer of the Nigerian National Petroleum Corporation.

He further explained that series of meetings had been held with individuals who were willing to invest in the refineries.

He continued, “I need to state this clearly that this is not a sale, this is not a concession, this is a financing scheme and there are over 30 people who have indicated interest in that financing. They are going to go through the usual due process mechanism to see who qualifies for that financing.

“What we have resolved, however, which we have at least an understanding, is that each of the refineries will be repaired by the individual companies that built the refineries.”

This development is coming after the senate passed the much-delayed controversial PIB into law as the Petroleum Industry Governance Bill (PIGB), which provides for a new regulatory agency known as Nigeria Petroleum Regulatory Commission (NPRC) that will take over the functions of Petroleum Inspectorate, PI, the Department of Petroleum Resources , DPR, and the Petroleum Products Pricing Regulatory Agency, PPPRA.

Nigerians are waiting for the diligent implementation of these new laws and policies so that the petroleum industry which has historically been defined by scandals can undergo a rebirth.

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