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Nigeria to Begin Tracking Oil From Production to Destination in 2017, Minister Says

10 Jan 2017 5:25 am

By Obafemi Oredein

IBADAN, Nigeria--Nigeria plans to roll out a program for tracking its oil from production to destination, said Emmanuel Ibe Kachikwu, minister of state for petroleum resources, in an effort to combat widespread theft of the country's crude.

In a video about the 2017 outlook for Nigeria's petroleum sector that was posted Monday on his verified Facebook account, Mr. Kachikwu said "there were too many seepages, too many leakages and too many stories" about the nation's oil producers. This was a reference to reports of large-scale oil theft and illegal shipments of crude from the country, which is a member of the Organization of the Petroleum Exporting Countries.

"This year we are going to commit to trying to find a way of tracking our oil from the moment oil is produced to the time it is sold and where it is sold. We will be able to track them. If we do that, we envisage billions of dollars savings for the federal government," said Mr. Kachikwu. He didn't provide a specific date for the start of the program or further details about the plan in his statement.

Nigeria, Africa's largest crude exporter, has suffered sizable revenue losses from the theft and illegal shipments of its oil from the Niger Delta, where the bulk of its crude is produced. Nigeria depends on oil exports for over 90% of its foreign-exchange earnings and 79% of its government revenue, according to the International Monetary Fund.

Mr. Kachikwu said Nigeria was looking for investments in its oil industry of at least $10 billion to $15 billion over the next two to three years. As part of this effort, he said he country plans to award oil block and marginal field contracts this year.

Mr. Kachikwu said the crisis in Niger Delta had been "lingering for too long," adding that efforts would be made to stabilize oil production which had been disrupted by militant attacks during much of 2016.

The Niger Delta Avengers and other militants groups damaged several oil and gas pipelines in the region, resulting in production dropping to 1.3 million barrels a day, according to Mr. Kachikwu. He said that output since has been raised to 1.9 million barrels a day, without specifying when this was achieved.

Write to Obafemi Oredein at realtimedesklondon@dowjones.com
 

(END) Dow Jones Newswires

January 10, 2017 00:25 ET (05:25 GMT)

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