Kachikwu stated this on Tuesday at the on-going annual conference and exhibition of the Nigerian Association of Petroleum Explorationists in Lagos.
“The imperative for our (oil and gas) industry is really not to remain extractive. We have in the last 60 years extracted hydrocarbons and sent it offshore. Part of the fiscal policies stance and the petroleum policy, gas policy, etc, is to ensure that that changes significantly,” said the minister, who was represented his Special Adviser on Fiscal Strategy, Dr Tim Okon.
He noted that the ministry’s Seven Big Wins initiative was aimed at focusing on economic development, and not the collection and division of rents.
He said, “Our task is not only to extract but also to process and to create activities that lead to economic development. The essential reforms in the oil and gas industry must be anchored on getting our people back to work
“Our economy lacks the essential engine for growth. We are in an energy trilemma: We export energy in a primary form, we import petroleum products, and we have a power crisis. That is called the energy trilemma. So, we must deal with this. We are working so that we get results.”
Kachikwu said the government was committed to doing a lot to transform the economy for the benefit of Nigerians, noting that “natural resources take hundreds of years to form and usually require very little years to extract and dispose of.”
The Chief Executive Officer, Seplat Petroleum Development Company Plc, Mr Austin Avuru, in his keynote speech, noted that the country fell into a recession in 2016 on the back of oil price crash and production decline.
He warned that the economy would slip back into a recession if oil price and production drop again.
Avuru said, “With prices going back up, confidence is rising and more projects are being sanctioned. We are now seeing a paradigm shift and attempting, as a country, to then use of our gas resources not as just a rental revenue agent but as an enabler for business and for bigger economic growth.
The truth is that an economy is as large as how much energy it consumes. So, when we produce 8.9 billion standard cubic feet of gas a day, and only nine per cent of it is consumed domestically, it says a lot about what our economy looks like.”
According to him, the countries with the highest Gross Domestic Product per capital are also the largest energy consumer per capital, and that is what it should be.
Avuru said, “So, as a country, our aspiration, beyond just increasing our oil and gas production, should actually be to maximise our domestic energy consumption; that is what will expand the economy, not just receiving $25bn-$30bn every year from oil revenue from abroad. That is not what will grow our economy.”
Meanwhile, the West African crude differentials were steady on Tuesday as Angolan state oil company, Sonangol, finalised its term allocations and traders awaited Nigerian loading programmes.
About 20 to 24 cargoes of Nigerian crude were still available, traders said, slightly more than thought on Monday, according to Reuters.
Qua Iboe, Nigeria’s largest crude oil grade, was last being offered at around dated Brent plus $1.70 a barrel, a trader said, in line with indications reported on Friday. Total was heard to be holding some Qua cargoes.