Speaking on Saturday at a luncheon organised in his honour by the Petroleum Club in Lagos, Kachikwu 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 an announcement to that effect may be made by the end of this year.

 

Kachikwu also unveiled his plan to source for $500 million, which will be repaid over a period of eight years, 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.

 

"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 noted that there would be no space for armchair and brief-case businessmen in the present NNPC.

 

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.

 

He 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".

 

"I mean internal cost and not cost of projects. For instance, hiring of aircrafts by the NNPC was over N350 million in 2015 alone before I came in but since August when I came in, it is zero. It does not mean that I will not hire private jets if the need arises. But when I hire aircraft, I should not be the one to pay. Our joint venture partners should pay because we have 60 per cent stake," he explained.

 

Kachikwu said from the seismic results carried out for crude oil exploration in the Chad Basin, there are positive signals that crude oil may be discovered in the area. According to him, there are strong indications that an announcement may be made to that effect by the end of this year.

 

"Crude oil discovery in Chad basin is key for political balancing of production and will also ensure availability of crude oil for refineries that will be built in the north," he added.

 

The NNPC boss further revealed that the corporation would borrow $500 million from outside to repair the refineries, adding that the money would be repaid in eight years.

 

In his welcome speech, the Chairman of Petroleum Club, Otunba Funsho Lawal noted that the oil and gas industry is facing a lot of challenges, both locally and globally.

 

He identified some of the challenges facing Nigeria's oil and gas sector to include: non-passage of the Petroleum Industry Bill (PIB) after eight years; inability of the NNPC to meet its cash call obligations to the joint venture partners; subsidy and deregulation issues; slump in oil prices, which have led to dwindling crude oil revenues to the federal government and gas supply challenges.

Source : allafrica.com