The Federal Government,on Monday, October 17, stated that it was eyeing a minimum investment of $15 billion from India by December 2016, for the nation’s oil and gas sector.
Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, who spoke during a three-day working visit to India, stated that Nigeria is likely to sign a cash-raising oil deal with India for $15 billion by the end of this year, while the Indian oil ministry disclosed that Nigeria had requested an upfront payment.
“Nigeria has a bit of a cash flow problem right now. Our reserves are not as strong as we want them. The impact of that is the value of the naira is coming down. So what we are trying is to leverage on the assets we have to receive immediate cash,”Kachikwu said.
The initial $15 billion investments, according to Kachikwu, would be upfront payment and would be a critical condition for the terms between countries to be agreed to.
According to a statement by the Federal Ministry of Petroleum Resources, Kachikwu said the upfront payment would be “for crude purchase, to be repaid on the basis of firm Term Crude Contracts over some years and in consideration for collaborating in refining sector, exploration & Production (E&P) activities on government-to-government (G-to-G) basis by Indian Public Sector Undertaking (PSU) Companies, long term contracts for supply of crude to Indian PSU companies from Nigeria.
“It also includes the possibilities of executing City Gas Distribution (CGD) and Liquefied Petroleum Gas (LPG) infrastructure projects by Indian PSU companies in Nigeria.”
The statement further disclosed that between 2015 and present, India imported nearly 23.7 million metric tonnes of crude oil from Nigeria, representing almost 12 per cent of India’s overall imports, while over two million metric tonnes per annum of Liquefied Natural Gas, LNG, was imported by the country from Nigeria.
