The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has signed Memorandums of Understanding (MoUs) with several Chinese firms of over $80 billion new investments which will cover a period of 5 years in the oil and gas industry. This also includes pipelines, refineries, gas and power, facility refurbishments and upstream financing.
According to reports, 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 with the aim of bridging the infrastructure funding gaps in the Nigerian oil and gas sector.
“I can confirm that we had a successful outing and finally raised investment commitments and signed MoUs worth $80 billion.
The minister also disclosed that aside 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.
“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.
The minister also made a commitment to ensure the deals are signed, sealed and delivered by all parties involved.
A source from the ministry of petroleum says some of the companies that signed the MoUs include: China North Industries Corporation (NORINCO), CINDA, CNOOC, Chem China and Sinopec/Addax and ICC-NDRC, among others.
Businesses, over time should not only produce profits, but they should produce positive environmental outcomes and contributing to a better society but a longer-term view needs to be taken into focus.
What will be the impact of such an investment on the mainstream oil and gas sector of the Nigerian Economy in the mid-long term?