Nigerian Federal Government has come on board with Chinese companies and signed a US$80bn oil and gas contract.The contract signing agreement comes after Emmanuel Kachikwu, the Nigerian State Oil Minister and the head of the Nigerian National Petroleum Corporation (NNPC) met with the Chinese investors in Beijing in regards to upgrading Nigeria’s ageing and run-down refineries.
Two months ago, President Muhammadu Buhari traveled to China and secured a US$6bn loan. The loan came with a currency swap deal to mitigate the looming recession and ballooning inflation in the West African county.
Nonetheless, the NNPC aims to bridge the infrastructure funding gaps in the Nigerian oil and gas sector. However, the signed agreement will entirely depend on whether the current Federal Government will terminate the rising militancy in the oil-producing south for concrete upgrades results.
According to London-based Energy Aspects analyst, Rhidoy Rashid, Nigeria’s current security situation isn’t stable and this may greatly injure the country’s economy status, given that some of the project will push through to completion while others are feared they may not make it to completion. Rashid further added that such headline announcements are considered significantly larger than the actual investment that ends up happening.
Nigeria is known to be an oil hub country. Oil business in the Niger delta region has significantly deteriorated the oil rich region due to militant’s attacks who have been demanding a bigger oil revenue share and more political autonomy.
On the other hand the NNPC has recently revealed the June back up production which was previously recorded to be as low as 1.6 million barrels per day and slightly rose by 0.3 million barrels making it to stand at 1.9 million barrels per day. The oil production improvement has been recorded due to respite in attacks and work repair.