The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, on Thursday said the oil sector needed huge investments to the tune of 100 billion dollars.
Kachikwu said this while reeling off the urgent needs of the sector at the closing ceremony of the just-concluded maiden Nigeria International Petroleum Summit (NIPS) in Abuja.
“We need to look at investments. What we have done over the last two years has helped.
“Suddenly we are looking at investment portfolios over the next two to three years of close to 40 billion dollars but 40 billion dollars is not enough to drive this industry.
“Our estimate is that you need about 100 billion dollars worth of investment to drive this sector. Those investments will go into gas projects, they will go into pipelines that have been replaced.
“They will go into new plants; they will go into the flare policy of the government; they will go into the development of LPGs and CNGs.
“We need to begin to convert our petrol consumption cars to gas and electricity driven cars so we can avoid some of the embarrassments we have in terms of our supply needs,” he said.
According to him, every average Nigerian says the oil industry is not transparent despite all that has been done in the oil industry.
“Transparency is key. We continue to have the negative vibe in transparency. What it says to us is that something must still be missing.
“Given the fact that the cardinal focus of this administration is anti corruption, we must ensure that whatever we do, we must give serious attentions to transparency.
“We need to look at our processes; we need to look at our contractual terms, we need to review our patronage culture; we need to diversify the opportunities.
“When we are transparent, investors get a lot confidence and are able to come in droves,” the minister said.
Other issues he listed that needed to be addressed urgently included security, cost of producing a barrel of crude and full deregulation.
“The federation is worried about the fact that while countries like Saudi Arabia are targeting cost per barrel below 10 dollars, we are still oscillating in the mid-20s.
“I am happy that one or two International Oil Companies have been able to achieve production cost of about 15 dollars, we still need to get everybody else to take that model.
“One of the things that we are going to be seeing is how to incentivise those who have the least cost production and not to penalise but quite frankly pull the ears of those who want to continue to run a high cost profile.
“In an era in which OPEC quotas are going to be obviously in place over the next two years, I will not be surprised if we get to a point where those who give us the least cost oil will get the first preference in terms of the barrels that we will put in the market.
“Cost is very important and we have to look at it,” he said.
Projecting into the future, he said “over the next five years, we will like to look at the production volumes.
“We are targeting about three million barrels over the next five years and the projects that we have on ground can get us there.
“So whatever we need to do, we need to ensure that the capital that is available to drive this is not sucked out by other investments in the sector”.
He urged Nigerian investors to come on board as his target was that the local production of oil output would in five years be 25 per cent.
“The future is promising, lots of opportunities and lots of energies will be getting off the ground.
There is going to be challenges, fiscal issues that need to be addressed to empower everybody to invest. The oil sector provides a catalyst to diversify this economy,” Kachikwu said.