By Bassey Udo
Nigeria must take decisive actions to rid the oil and gas industry of all obstacles to efforts to increase the country’s crude oil and gas production to grow its national reserves, the Group Chief Executive of the Nigerian National Petroleum Company (NNPC) Limited, Malam Mele Kyari, has said.
Kyari who spoke in Abuja on Tuesday at the opening ceremony of the 23rd edition of the Nigeria Oil & Gas Conference and Exhibition (NOG Energy Week) said the only way to realise its target of two million barrels per day of crude oil production was to remove all obstacles in the procurement and contracting processes towards realizing the aspiration.
“The bigger interest of the country is to produce more oil and gas. We have the reserves. It is a mere dream until we produce. What we are focusing on with our partners today is to produce more oil and grow our reserves. We must mobilise funds; get the right people to work; have the right technology in place, and the will to produce, so that we can all benefit from it,” he said.
While acknowledging that all these qualities were not lacking currently in the country, Kyari said the NNPC, which is a partner to more than 80 percent of the companies producing oil in this country, has decided to stop the debate and take decisive actions to remove the obstacles hindering the production of more oil and gas in the country.
“We have decided to stop the debate. We have declared war against all obstacles to our achieving this goal. We have the right troops. We know what to fight, and what we have to do at the level of assets development. We have engaged our partners on this. They are excited about it. Any partner that does not do what it has to do will get it hot. This is our new way of doing things. We can’t wait for anyone. We can’t afford to negotiate any further,” he declared.
“We are moving to another level. Within our companies, we have principalities who are converting procurements to business and would not let people complete their procurement, by adding costs to the operators’ procurement. We will soon cap the cost of production. You can do anything you want, provided you produce oil at $20 per barrel,” he said.
On the development of domestic gas resource, the NNPC boss lamented the dearth of gas infrastructure in the country, despite government’s key objective of delivery gas to the people, adding that the NNPC has taken up the challenge to invest in the development of that sector.
“We are unable to utilize the huge resources we have in Nigeria. Nobody is putting money into the development of the domestic gas infrastructure. But the NNPC is leading this. We are building the infrastructure that is required to deliver gas in the country. Within the next six months, you will see the difference. We are deepening domestic gas utilization, powering the CNG initiative, so that Nigerians can have automobile fuel,” he said.
On medium to long-term measures aimed at boosting and sustaining production, Kyari said NNPC Ltd. would replace all the old crude oil pipelines built over four decades ago and also introduce a rig-sharing programme with its partners to ensure that production rigs stay in the country for between four and five years in line with the standard practice in most climes.
“We keep talking about increasing production. Rigs come here, jack ups in deepwater and they drill one well and leave. That’s why we have no guarantees around the availability of rigs in this country. Nobody will come here, mobilise for one rig and leave anymore.
“We have taken another step. We have set up a rig-sharing clause with our partners, so that at the end everybody must bring to the table its drilling programme, so that we can all align and ensure that when rigs come here they will stay for three to five years, and we are sure the trend in oil production will increase,” he announced.
He called on all players in the industry to collaborate with the NNPC towards reducing the cost of production and boosting production to target levels.
He expressed the Company’s 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, industrial development and economic prosperity of the country.
On Compressed Natural Gas (CNG), Kyari observed that NNPC Ltd. has since keyed into the Presidential CNG drive, adding that in conjunction with partners such as NIPCO Gas, the NNPC Ltd. has built a number of CNG stations, 12 of which would be commissioned this week in Lagos and Abuja.
At the opening session of the conference, the Secretary General of the Organisation of the Petroleum Exporting Countries (OPEC), Haitham Al Ghais, and the Secretary General of the Gas Exporting Countries Forum (GECF), Engr. Mohamed Hamel, sent goodwill messages.
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, and his counterpart in the gas sector, Ekperikpe Ekpo, and the Special Adviser to the President on Energy, Ms. Olu Verheijen as well as the Chairman, Independent Petroleum Producers Group (IPPG), Abdulrazaq Isa also presented goodwill messages.
The theme of the conference is Showcasing Opportunities, Driving Investment and Meeting Energy Demand.”