Senator Heineken Lokpobiri, Minister of State, Petroleum Resources (Oil), has called for more investments in the oil and gas industry to ramp up production and boost foreign exchange earnings.
Lokpobiri made the call on Tuesday at the Nigerian Oil and Gas (NOG) Energy Week currently holding in Abuja.
The country has over 37.5 billion barrels of proven crude oil reserves and 209 trillion cubic feet (tcf) and 600 tcf of proven and contingent gas reserves respectively.
The Independent Petroleum Producers Group (IPPG) says Nigeria finds itself in a situation where its daily production has significantly dropped to about 1.3 million barrels of oil and 8.5 bcf of gas.
Lokpobiri, in an opening address, who blamed the development on lack of drilling investments in the sector, disclosed that efforts were ongoing to change the narrative by attracting more investments into the sector.
“We have been working hard to ramp up production. The overall objective is to increase production.
“It is when we ramp up production that we will be able to get the required forex inflow into the country, get money to fund budget, and satisfy energy demand.
“But you can only increase production by way of increasing investments,” Lokpobiri said.
Mr Ekperikpe Ekpo, Minister of State, Petroleum Resources (Gas), in an address, said the Ministry had been instrumental in implementing reforms that made Nigeria an attractive destination for investors.
He said the Petroleum Industry Act (PIA) 2021 and the recent Presidential Directive for Oil and Gas Companies on Tax Incentives, Exemption, Remission, among others by President Bola Tinubu, created a conducive environment for investment.
“The regulatory frameworks now in place incentivise investment, streamline bureaucratic processes, and provide clarity on fiscal terms”, he noted.
Earlier, the Chairman, IPPG, Mr Abdulrazaq Isa, had sought for measures by all relevant stakeholders to address the dwindling production level and under-investment in the oil and gas industry.
He said that in spite of the nation’s world hydrocarbon resource base, with over 37 billion barrels of proven crude oil reserves and 207 tcf and 600 tcf of proven and contingent gas reserves respectively, daily production had dwindled.
He expressed worry that daily production had significantly dropped and stood at about 1.3 million barrels of oil and 8.5 bcf of gas today.
“This is way below our capacity as a nation and by all globally acceptable standards, this reserves to production ratio is extremely low and a clear indicator that the industry is in a dire situation”.
NNPC Ltd declares state of emergency on oil, gas production
Meanwhile, the Nigerian National Petroleum Company Limited (NNPC) Ltd has declared a state of emergency on production in Nigeria’s oil and gas industry.
The NNPC Ltd has also called on all players in the industry to collaborate towards reducing the cost of oil production and boosting production to target levels.
Malam Mele Kyari, Group Chief Executive Officer, NNPC Ltd, made this known in Abuja, on Tuesday at the ongoing 23rd edition of the Nigeria Oil & Gas (NOG) Conference and Exhibition holding from June 30 to July 4.
“We have decided to stop the debate. We cannot afford to negotiate further, we have declared war on the challenges affecting our crude oil production.
“Our biggest interest is to produce more oil and gas in spite of oil theft and other challenges.
“We have the right tools. We know what to fight. We know what we have to do at the level of assets. We have engaged our partners and we will work together to improve the situation,” he said.
Kyari said a detailed analysis of assets revealed that Nigeria could conveniently produce two million barrels of crude oil daily without deploying new rigs, but decried the inability of players to act in a timely manner as major impediment.
He said obstacles to effective and efficient production such as delays in procurement processes and old pipeline network were affecting the industry.
He said NNPC Ltd. would replace all the old crude oil pipelines built over four decades ago and introduce a rig sharing programme with its partners to ensure that production rigs stayed in the country.
This, he said, would be a medium to long-term measures aimed at boosting and sustaining production.
He expressed commitment to investing in critical midstream gas infrastructure such as the Obiafu-Obrikom-Oben (OB3) and the Ajaokuta-Kaduna-Kano gas pipelines to boost domestic gas production and supply for power generation.
On Compressed Natural Gas (CNG), Kyari said that NNPC Ltd. had keyed into the Presidential CNG Initiative drive.
He said in conjunction with partners such as NIPCO Gas, NNPC Ltd. had built a number of CNG stations, 12 of which would be commissioned on Thursday in Lagos and Abuja.
The Secretary-General of the Gas Exporting Countries Forum (GECF), Mr Mohamed Hamel, in an address, also advocated for natural gas infrastructure and penetration for energy stability and security.
