Nigeria commenced negotiations with the government of India for the release of $15bn as advance payment for crude oil purchase.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, disclosed this on Monday.
The minister was quoted to have said in a statement signed by the Director, Press, Ministry of Petroleum Resources, Idang Alibi, that the deal would be in consideration for Indian public sector companies collaborating with Nigeria in the refining sector as well as exploration and production activities.
He explained that the collaboration would be on a government-to-government basis by Indian PSU companies, long-term contracts for supply of crude to such firms by Nigeria, and executing city gas distribution.
Kachikwu, who is currently on a three-day visit to India, was said to have concluded talks on the investments in Nigeria’s oil and gas sector in a bilateral meeting with the Indian Minister of Petroleum and Natural Gas, Shri Dharmendra Pradhan.
The statement said both ministers noted the existing and significant engagement between the two countries in the hydrocarbon sector, while acknowledging that Nigeria is one of the largest trading partners of India in Africa, especially in terms of crude oil and gas.
It said in 2015, India imported nearly 23.7 million metric tonnes of crude (nearly 12 per cent of the country’s overall imports) and over two million metric tonnes of Liquefied Natural Gas from Nigeria.
The statement read in part, “Following this negotiation, the two countries have agreed to work on a Memorandum of Understanding to facilitate investments by India in the Nigerian oil and gas sector, and specifically in areas such as term contract, participation of Indian companies in the refining sector, oil and gas marketing, upstream ventures, the development of gas infrastructure and in the training of oil and gas personnel in Nigeria.
“The MoU is expected to be firmed up in December during Petrotech-2016. Both ministers also agreed to strengthen the existing cooperation in oil and gas sector, and in particular to explore investment opportunities for Indian public and private sector companies in Nigeria.”
On the sidelines of the visit, Kachikwu had one-on-one meetings with top executives of Indian public sector oil and gas companies, and representatives of some private firms, the statement said.
Reuters quoted the minister as saying that the nation’s oil production rate was expected to jump by 22 per cent by the year-end to 2.2 million barrels per day from current levels, adding that he hoped a force majeure on all its oil fields would be lifted by December or January.
Kachikwu told reporters, “Nigeria has a bit of a cash flow problem right now. Our reserves are not as strong as we want them. The impact of that is the value of the naira is coming down.
“So, what we are trying is to leverage the assets we have to receive immediate cash.”