Monday, 15 February 2016

Nigeria in talks with oil majors to repay debt, invest in refineries



Nigeria is in talks with oil majors and banks to raise capital for new drilling and to repay up to $4 billion in debt that the state oil firm has accumulated over years of mismanagement, the firm's head told Reuters.

Emmanuel Ibe Kachikwu, who is also the minister of state for petroleum, said he wanted to increase output to up to 2.5 million barrels per day by the end of 2016. Currently, the OPEC member pumps 2.3 million bpd.

President Muhammadu Buhari has made reforming the oil sector a priority as a slump in oil prices hammers the economy. The former military ruler has fired the NNPC board and appointed Kachikwu to overhaul a company whose opaque structures have allowed corruption and oil theft to flourish.

Nigeria's oil and gas output has been relatively stagnant as big offshore projects have been held up by much-delayed government funding and uncertainty over fiscal terms.

Africa's biggest economy produces oil with foreign and local firms through production-sharing contracts and joint ventures (JVs) but investments have been held up because NNPC has been unable to pay its part: bills have been piling up since 2012.