Nigeria is seeking a $15billion cash raising oil deal with India in a bid to shore up its foreign reserves.
Minister of State for Petroleum Ibe Kachikwu, who is in India, has negotiated the $15 billion investment with terms to be agreed.
The Indian Government is expected to make an upfront payment for crude purchase to Nigeria, which is to be repaid on the basis of firm Term Crude Contracts over some years.
India’s oil ministry has confirmed 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,” Kachikwu told reporters yesterday.
He added: “The impact of that is the value of the naira (currency) is coming down. So what we are trying is to leverage on the assets we have to receive immediate cash.”
According to the ministry’s Director of Press, Idang Alibi, the negotiation will include:
consideration for Indian public sector companies collaborating in refining as well as exploration and production on a Government-to-Government basis by Indian PSU Companies;
long term contracts for supply of crude to Indian PSU companies from Nigeria and possibilities of executing CGD and LPG infrastructure projects by Indian PSU companies in Nigeria.
The minister, on a three-day visit to India, also concluded talks on investments in Nigeria’s oil and gas sector in a bilateral meeting with his Indian counterpart in charge of Petroleum and Natural Gas, Shri Dharmendra Pradhan.
Kachikwu said Nigeria expected its oil production rate to jump by 22 per cent by the year-end to 2.2 million barrels per day (bpd).
According to him, the force majeure on all oil fields would be lifted by December or in January.
He added that the Organisation of Petroleum Exporting Countries (OPEC), which had agreed to cut world output to rescue prices, had however allowed a production window of 1.8 million bpd to 2.2 million bpd for recession-hit Nigeria.
Besides the impact of low oil prices, which sales account for 70 per cent of Nigeria’s revenue, attacks by militants have crippled the country’s energy facilities.
Relentless attacks have taken out pipelines in Nigeria. Qua Iboe, Nigeria’s largest export stream, and Forcados remain under force majeure.
Kachikwu, who said oil prices would rise from current levels by December, discussed expanding energy ties with the Indian Oil Minister Pradhan.
In the last fiscal year ended March 31, Nigeria accounted for nearly 12 per cent of all crude oil imports by India, one of the fastest growing economies and energy markets in the world.
