CRUDE OIL DISCOVERED IN BORNO STATE - FG

After several months of exploration activities, Borno State has joined the league of oil-producing states in Nigeria, as the Federal Government, yesterday, said crude oil had been discovered in the state. Permanent Secretary of the Ministry of Petroleum Resources, Mrs. Jamila Shua’ra, disclosed this during the agreement signing ceremony for joint venture, JV, cash call exit and presentation of the petroleum sector score card in Abuja. Shua’ra, however, failed to state the particular area in Borno State where oil was discovered and if the discovery was in commercial quantity. She attributed the discovery of oil in Borno and Lagos states to the doggedness of the present administration. In the scorecard presented to stakeholders, the ministry also noted that the introduction of Price Modulation Mechanism and Appropriate Pricing Framework had helped the Federal Government to save N1.4 trillion that would have been expended on subsidy payment between May and November. Also, the ministry announced that the Department of Petroleum Resources, DPR, would in 2017 conduct bid rounds for open blocks and conclude the previously aborted marginal fields bid round to enhance the entry of new players, stimulate competition and generate revenue for the government.


Osinbajo on gains of subsidy removal Commenting on the scorecard, Vice President Yemi Osinbajo disclosed that the elimination of petroleum subsidy had removed a huge financial burden from the Federal Government. According to him, the Federal Government had commenced moves to raise the country’s domestic refining capacity for petroleum products by repairing the existing refineries, licensing modular refineries and supporting the development of private-led refineries. He said: “Recently, the Federal Executive Council approved new measures and strategies aimed at eliminating the burden of joint venture cash calls arrears and easing future payments in the upstream sector. The measures will boost additional investments and raise daily production levels to about 2.8 million barrels per day, mbpd.” Speaking in the same vein, Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, stated that prior to the removal of fuel subsidy, the country was losing over N1.2 trillion annually, while the issue of fuel scarcity was rampant. According to him, the elimination had led to a situation where refined petroleum consumption had gone down from an all-time high of 40 million litres a day to about 28 million litres a day. Commenting on the JV cash call exit, Kachikwu expressed optimism that the arrangement would bring about a flurry of investments in the oil and gas industry, while it would also ensure that projects that were earlier abandoned by international oil companies were revived. The companies involved in the new cash call funding model are Shell, Nigerian Agip Oil Company, Chevron, Total and ExxonMobil. Kachikwu challenged the oil companies to put their money where their mouth is and increase their investments in the country. Also speaking, Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Mr. Maikanti Baru, disclosed that the cash call exit arrangement would help address the longstanding issues of unpaid cash call arrears, underfunding of the joint venture and the burden of monthly cash call payments by the Federal Government.