LAGOS, Feb 25 – Nigeria\’s oil minister said the country is ready to push ahead with key reforms in its hydrocarbons sector, plagued by ongoing violence in the restive southern Niger Delta region.
"The message we want to convey… is that all the stakeholders are working earnestly to ensure the key aspects of the reform programme are all in place in the shortest possible time," Minister Rilwanu Lukman told investors at an annual conference.
The bill paving the way for the reforms has been put before parliament but there has been no indication as to when it might be adopted.
Lukman was seeking to reassure and stimulate investors who are jittery because of the global economic crisis and the violence in the Niger Delta.
The reform starts with the Nigerian National Petroleum Corporation (NNPC), often criticized for its inefficiency and bureaucracy.
The aim is to change it into an entity able to turn to the capital markets for funding.
For the moment the state oil company relies on the state budget to finance its joint ventures with the likes of Royal Dutch Shell, Exxonmobil, Total or Chevron and oil companies often complain NNPC is unable to contribute its share of the funds required for projects.
The planned reform also provides for fiscal changes which are causing concern among the oil majors.
The new head of NNPC Mohammed Barkindo told the conference that despite the global economic downturn "NNPC is relatively well positioned to weather the storm."
But he admitted: "There are challenges to overcome, the low oil and gas prices create cash flow challenges for all in the industry, NNPC included."
With the credit crunch, he added, access to credit will become more challenging and will clearly impact on NNPC.
Shell\’s vice-president for Africa, Ann Pickard, said her company "supports efforts to improve functioning, efficiency, transparency and financing of the oil and gas industry".
She warned uncertainty will slow or deter investments.
"Getting it right is absolutely essential… getting it wrong will not be acceptable for Nigeria or for the OICs," Pickard said, referring to the international oil companies.
On the sidelines of the conference, Nigeria and Shell announced a 1.6 billion dollar (1.25 billion euro) gas production project in the southern state of Baleysa.
Investors say that one concrete sign that Nigeria is serious about the reforms is the recent shake-up at the top of NNPC and at the Department of Petroleum Resources (DPR), the agency in charge of allocating concessions for oil exploration and production.
In January President Umaru Yar\’Adua fired the then NNPC boss, his namesake Abubakar Yar\’Adua, and replaced him with Barkindo, without any explanation.
Days after appointing Barkindo, Yar\’Adua put Billy Agha, a geologist and former NNPC executive, at the head of DPR, replacing Tony Chukwueke, suspended last year over alleged irregularities in the sale of oil concessions.
A parliamentary enquiry is looking into the sale of concessions in 2005, 2006 and 2007 as some were sold off to front companies.
Shortly after taking office at the end of May 2007, Yar\’Adua announced his intention to split NNPC, set up in 1977, into five separate entities.
This transformation should be completed by the end of 2009, he told AFP last year.
"The will is there, but there\’ll definitely be some resistence," the head of an international oil company told AFP.
Nigeria and Angola rank as Africa\’s top two crude oil producers. Nigeria\’s production has been cut by around one quarter since 2006 to some two million barrels a day because of attacks on oil installations in the Delta.