NNPC to privatise pipelines to end JV cash call challenge

Nigerian National Petroleum Corporation (NNPC) has expressed its readiness to raise funds from international investors and the private sector in 2016 to fund Joint Venture cash calls between it and international oil companies (IOCs) operating in Nigeria.

Ibe Kachikwu, minister of state for petroleum resources and group managing director of NNPC, made this disclosure during an interactive session with the Nigerian community in Vienna, Austria.

In order to achieve this, the network of pipelines belonging to NNPC and estimated at over 5000 kilometres across the country would be privatised.

The essence is to bring about increased efficiency in its management and to minimise the high incidence of pipeline vandalism currently plaguing the nation’s petroleum sector.

Kachikwu said high-level discussions were already underway with local and international investors to bridge the perennial JV cash call funding gap.

The initiative is also geared towards rebottling the Federal Government against the burden of funding capital-intensive projects in the upstream sector of the oil and gas industry, he said.

According to him, in the next 24 months, Nigerians would see a positive dramatic turn in the refinery model in the country, and going forward, the new refinery model to be introduced will not only meet the petroleum products need of the country but that of the West African sub-region.

“The new model is that refineries would now buy their own crude oil, refine it and make remittances to the Federal Account Allocation Committee (FAAC). They would operate a semi autonomy system that would enable them to run in a profitable manner,” Kachikwu said.

It would be recalled that Kachikwu had given a 90-day fast track ultimatum for the refineries that would lapse by December 2015.

He noted that from available reports, two of the refineries were likely to meet the deadline.

In a related development, he also disclosed that a ‘Clean Nigeria after Oil Initiative’ would be introduced in 2016, saying the initiative would set in place a process where all the IOCs operating in Nigeria would adopt global best environmental practices that would guarantee the sustenance of the flora and fauna of communities where they operate, even after they have long left the country.

“I will engage the IOCs to stand up and get counted in the area of best environmental practices in 2016. This initiative would help the IOCs to maintain a cordial relationship with the communities where they operate and the communities too would be satisfied with the efforts at the end of the day,” Kachikwu said.