RMAFC backs FG on $15bn cash-for-oil deal with India

RMAFC backs FG on $15bn cash-for-oil deal with India
Dr. Emmanuel Ibe Kachikwu, Minister of State for Petroleum Resources

 The Revenue Mobilisation Allocation and Fiscal Commission has thrown its weight behind the move by the Federal Government to seal a $15bn future oil deal with the government of India.

The Minister of State for Petroleum, Dr. Ibe Kachikwu, had on Tuesday announced a deal with the Indian government that would immediately put $15bn cash in the coffers of the Nigerian government for oil contracts that would be supplied in the years ahead.

Under the terms of agreement, the Indian government is expected to make an upfront payment to Nigeria for crude purchase, which is to be repaid on the basis of firm term crude contracts over some years

The deal also involves Indian public sector companies collaborating in refining as well as exploration and production with long- term contracts for supply of crude to Indian PSU companies from Nigeria, and possibilities of executing gas infrastructure projects by Indian companies in Nigeria.

In a statement made available to our correspondent by the Head of Public Relations, RMAFC, Mr. Ibrahim Mohammed, the commission said the move was smart and also restated its opposition on the sale of national assets to raise funds to increase the government’s dwindling revenue.

Mohammed said, “The RMAFC has always been advocating that instead of selling off Nigeria’s strategic assets to solve its short-term expenditure requirements, the country should look elsewhere to attract long-term investments like this that will bring good returns for the economy through employment generation, wealth creation and sustainable development.

“In order to arrest the high incidence of gas flaring and harness the huge potential in the gas sub-sector in Nigeria, which ranks seventh in the world and first in Africa, with natural gas reserves base totalling 188 trillion cubic feet as of May 1, 2015, wealthy Nigerians and foreign investors should be encouraged to set up several Liquefied Natural Gas projects as possible.

“There is no reason why the country should not have four to 10 LNG projects, which will add value to production, create employment, enhance economic development and subsequently increase revenue generation for the federation.”

The RMAFC also commended Dangote Industries Limited for the recent acquisition of Twister B.V., a company headquartered in the Netherlands, delivering reliable, high-yield and robust solutions in natural gas processing and separation to the upstream and midstream oil and gas sectors.

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