India to pay Nigeria $15bn for oil exports

The federal government of Nigeria is set to receive $15bn from the Indian government to help Nigeria solve liquidity issues causing the current economic recession.

Punch reports that according to minister of state for petroleum Ibe Kachikwu, the funds is not a loan or gift but payments for oil that Nigeria will later supply to the Asian country.

He explained that the money is Nigeria’s earning from oil that it will sell to India over a period of time. The Indian government will however ‘help’ Nigeria by paying for the products upfront. India is one of the largest buyers of Nigeria’s oil.
Kachikwu, who gave details of how the deal would run, said it is a brilliant way of leveraging the country’s assets to get out of the recession.

“Nigeria has a bit of a cash flow problem right now. Our reserves are not as strong as we want them. The impact of that is the value of the naira is coming down.

“So, what we are trying is to leverage the assets we have to receive immediate cash,” Kachikwu told reporters .
A statement signed by the director, press, ministry of petroleum resources, Idang Alibi explained the terms of the deal thus:

“Following this negotiation, the two countries have agreed to work on a Memorandum of Understanding to facilitate investments by India in the Nigerian oil and gas sector, and specifically in areas such as term contract, participation of Indian companies in the refining sector, oil and gas marketing, upstream ventures, the development of gas infrastructure and in the training of oil and gas personnel in Nigeria.

“The MoU is expected to be firmed up in December during Petrotech-2016. Both ministers also agreed to strengthen the existing cooperation in oil and gas sector, and in particular to explore investment opportunities for Indian public and private sector companies in Nigeria.”

Meanwhile, National Household Kerosene Price Watch for September 2016 prepared by the National Bureau of Statistics (NBS) has shown that oil marketers have refused to sell at approved price by Nigerian National Petroleum Corporation (NNPC).

The marketers are selling the commodity at N288.68 per litre as against the N150 per litre price that NNPC approved.