…plans to increase the nation’

Ibe KACHIKWU

s crude production to 3M bpd by 2016

By Yemie ADEOYE

LAGOS– THE Nigerian National Petroleum Corporation (NNPC) has announced that the sum of 500 million united states dollars would be required to fix the country’s three refineries which are currently in a state of comatose.

Group Managing Director of the NNPC Dr. Ibe Kachikwu disclosed this at a Luncheon organised in his honour by the Petroleum Club in Lagos. He said that the refineries model cannot be sustained to achieve the desired production capacity.

The NNPC boss said the proposed money which will be repaid over a period of eight years is specifically to repair the refineries.

He revealed that he had been inundated with requests for allocation of Low Pour Fuel Oil (LPFO) and other products from the refineries but insisted that the time of allocation of products to people by the NNPC is over

Kachikwu has stated that his target is to ensure that Nigeria’s crude oil production capacity hits 3 million barrels per day by the end of 2016, from the current production level of about 2.5 million barrels per day.

He further stated that the preliminary results of seismic studies conducted in Chad Basin showed that there are potentials for oil discovery in the area, adding that he is optimistic that the announcement to that effect may be made by the end of this year.

“People come to my office to ask for allocation of LPFO but I tell them that the period of product allocation is over. That is clearly not my job.

“Nigerians must begin to add value to get results and income. My period, no matter how short, will not be characterised by favouritism.

“I like people to get rich but people should get rich based on ideas they bring to the table and not based on allocation paper given to them by government,” he said.
Kachikwu stated that there would be no space for armchair and brief-case businessmen in the present NNPC.
He stated that his target is to ensure that the country produces 3 million barrels per day by 2016.

According to him, the Nigerian Petroleum Development Company (NPDC), the upstream arm of the NNPC has increased its crude oil production capacity by 20,000 barrels per day since he took over 11 weeks ago as the Group Managing Director of the state-run oil firm.

Kachikwu stated that NPDC currently produces 220,000 barrels per day, which is expected to increase to 240,000 barrels per day by the end of this year.

According to him, his target is that by the end of 2016, NPDC will hit a production capacity of 350,000 barrels per day.

Kachikwu noted that NNPC will cut internal costs by 30 per cent by end of 2016 and also encourage the international oil companies (IOCs) to cut internal cost by 30 per cent, stressing that “2016 is my make or mar year.

He said the the Port Harcourt refinery has been shut down currently, bringing the combined output from 1.9 per cent in the last few weeks to zero output.

The NNPC had stated in its latest monthly report for September that: “Only Port Harcourt refinery produced 31,008million metric tonnes of petroleum products out of 35,648 MT (261,371.14 barrels) of crude processed at an average capacity utilization of 5.77 per cent.

Kachikwu, who described the poor refining capacity as worrying said there were plans to restore the lost glory of the refineries and ensure that they contribute massively to the national fuel consumption.

He said the corporation is speeding up the payment of the subsidy claims, adding that plans are also in the pipeline to review the subsidy system and bring down the amount of subsidy from about N20 per litre to about N5 per litre.

According to him, “products distribution is key to NNPC, and we have therefore sent out about 5000 trucks to various locations across the country in the last two days.”

Kachikwu however restated his commitment to turn around the NNPC to a world-class company within the next six to 12 months and ensure that it works efficiently in a transparent and accountable manner.

“We are out for transparency. We will be engaging the presidency of weekly basis, the governors monthly, and the National Assembly on monthly basis, while we continue to publish out reports monthly,” he said.

The NNPC boss, who agreed that these are very serious trying times for the industry, said the problems are actually more serious than we think, so Nigerians need to work hard and begin to add value.

He said the president is deeply worried about the prevailing situation in the industry and has gave him the mandate to fix the problems, “and I will never do things that will compromise my integrity,” he stated.

Kachikwu said his administration has recovered $420million from the legacy crude swap contract, increases gas supply to power plants to about 231 million standard cubic feet per day (mbpd) and planned to hit 240 mbpd next year.

“In 12 weeks at the NNPC, I have enhanced commercial value, increase productivity, increase profitability and improved governance at the corporation,” he stated.

On the much-delayed Petroleum Industry Bill (PIB), Kachikwu said the bill could not be passed in its current form, rather he will move to deal with the fiscal issues and move forward while other areas are sorted out.

He warned the briefcase businessmen to be careful, while the joint venture partners should come with clean hands in terms of project costing.

“Within 12 to 24 months, we want to build a competitive and stable investment regime that balances the needs of the nation and private investors.
” We will have zero tolerance for undue hike of project costs.

“The Joint Venture partners should go back to the table grill your numbers and be sure before you come to me,” he said.