The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has signed Memorandums of Understanding (MoUs) with several Chinese firms for over $80 billion new investments, spanning five years, in the oil and gas industry covering pipelines, refineries, gas and power, facility refurbishments and upstream financing.

Speaking exclusively to THISDAY yesterday from Beijing, China, Kachikwu said the agreements had been executed during the three-day roadshow in the Asian country to attract investments to Nigeria’s oil and gas sector.

The objective, he said, is to bridge the infrastructure funding gaps in the Nigerian oil and gas sector.

He said: “I can confirm that we had a successful outing and finally raised investment commitments and signed MoUs worth $80 billion.

“Out of this, $10 billion approximately was raised on the sides with our steer and push for two Nigerian companies – Delta Tek and Salvic Petroleum – while the balance of $70 billion includes MoUs signed by investors and financiers for projects with the Nigerian National Petroleum Corporation (NNPC).”

Salvic Petroleum is a company founded and chaired by Dr. ABC Orjiako, who is also the Chairman of foremost Nigerian oil independent, Seplat Petroleum Plc.

Kachikwu also revealed that other than the agreements executed for investments totalling $80 billion, he also got commitments from Sinopec and China National Offshore Oil Corporation (CNOOC) to commit to further investments in Nigeria’s upstream oil sub-sector to the tune of $20 billion, which would be concluded in the next few months.

This, he said, would effectively bring the total amount of prospective investments by Chinese firms over a five-year period to over $100 billion.

“Outside these (MoUs for $80 billion investments), the two largest oil companies in China, Sinopec and CNOOC, signed investment MoUs agreeing to announce after further discussions on major investment increases in the Nigerian oil and gas in the next few months.

“Given the areas of focus of these two companies, we do not expect that investment to be less than $20 billion. The net effect of these and other agreements in principle reached with investor interest in China on this roadshow will potentially provide investment funds for Nigerian oil and gas of over $100 billion over the next five years.

“These investments cover every facet of Nigeria’s oil and gas sector – upstream, pipelines, downstream, gas and power, modular refining in the creeks, engineering services, etc.

“It has been a fantastic outing and if we can follow through on all these, it will change the face of Nigeria’s oil and gas forever. This will bring hope even to the Niger Delta and is the single biggest amount of MoUs signed on investment in any third world country in a roadshow,” he said.

The minister informed that his ministry and NNPC would work round the clock over the next few months to perfect all the documents and meet all the conditions precedent to draw down on the commitments made by the Chinese firms.

“We will work round the clock to meet the conditions precedent to draw down and make these investments a reality. Of course, the federal government’s approval on certain commitments will be required as these involve sovereign guarantees.

“But the number of projects that require sovereign guarantees are very limited, as most of them are build and operate projects such as the pipelines and refineries, which are attractive prospects for the Chinese firms that have expressed interest in coming to Nigeria.”

He added that unlike the oil-for-infrastructure deals with Chinese, Korean and Indian firms entered into by the Olusegun Obasanjo administration, but all went burst due to the federal government’s inability to meet its own side of the bargain, the projects would not be paid for with oil, adding that the returns on investments made by the Chinese would come from the projects.

•Excerpted from a THISDAY report. Photo shows Dr. Kachikwu.

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