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Oil minister seeks $15bn upfront payment from India as major supply deal is negotiated

NIGERIA has commenced  negotiations with the Indian government asking for the release of $15bn as an upfront payment for future crude oil purchases under a major supply deal being negotiated by the two countries.


Currently the number one purchaser of Nigerian crude oil, India spends about $15bn a year in Nigerian petroleum as the two countries engage in commerce on a daily basis. Minister of state for petroleum resources, Dr Ibe Kachikwu, is currently negotiating a major supply deal with India and revealed that the government is demanding payment upfront.


According to Dr Kachikwu, 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 companies, long-term contracts for supply of crude to such firms by Nigeria and city gas distribution.


Dr 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. 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.


In 2015, India imported nearly 23.7m tonnes of crude oil, representing nearly 12% of her overall imports and over 2m tonnes of liquefied natural gas from Nigeria. Both ministers 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.


Dr Kachikwu added: “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.”


At the meeting, Dr Kachikwu said that Nigeria’s oil production rate was expected to jump by 22% by the year-end to 2.2m barrels per day from current levels. He added that he hoped a force majeure on several oil fields would be lifted by December or January.

Source: Today Trending News



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