Business & Economy - News - December 5, 2022

Nigeria adopts new strategy in crude oil development, says Sylva

By Bassey Udo

Nigeria will henceforth adopt a new strategy for crude oil development to avoid the repeat of the crisis the discovery of hydrocarbon brought for the Niger Delta region, Minister of State for Petroleum Resources, Timipre Sylva, has said.

The Minister said the country would no longer be dealing with crude oil as strictly an income earner, but as an economic enabler.

“We are trying to ensure we don’t look at crude oil now as an income earner, but as an economic enabler. That is why, if you look at the Kolmani area, what we are planning is, produce the oil and then add value right there.

“We are building a refinery there. We are building a gas processing plant and also a fertiliser plant there. That is now the way forward for us. As we begin to find more oil, we will begin to add value before we export whatever is left,” the minister further stated.

He said with the discovery of crude oil in Kolmani, a border town between Bauchi and Gombe states, Nigeria should brace up for more oil find in the region, adding that until recently only the Niger Delta has been explored for oil despite the potential in other regions of the country.

“Nigeria is a very prolific territory. But, so far only the Niger Delta has been proven as oil bearing territory. We have a lot of other basins within Nigeria. We have the Benue Trough, the Gongola Basin, the Sokoto Basin and the Dahomey Basin. We have a lot of Basins that have not been proven. We are targeting to get to see how we can explore for oil in those areas, especially now that the world is transiting.

“We want to see how we can quickly take advantage of what we have on the ground, because coal didn’t finish on the ground before the world moved on to oil. We don’t think that the world is going to wait for us. So, at this moment, we want to see how we can hurriedly take advantage of all the potential that we have.

“We have found oil only now in the North East, and we believe that we are going to find more oil in the North East, because we have also begun exploration in the Chad Basin on the Nigerian side.

“I believe that the Dahomey Basin is also very prospective. There is a lot of possibilities that a lot more oil will be found. Nigeria should brace up for more oil and more prosperity,” the minister said.

On the Organisation of Petroleum Exporting Countries (OPEC) crude oil production quota, Sylva said Nigeria would strive to meet its oil production of 1.8 million barrels per day (bpd) till the end of May 2023.

The Minister a day after the 34th OPEC and non-OPEC Ministerial Meeting on Sunday, said during the meeting members reaffirmed their decision during their 10th meeting on April 12, 2020 to maintain a production cut to stabilise global crude oil markets.

He said the latest decision was in line with the decision of the OPEC and non-OPEC participating countries under the Declaration of Cooperation at their 33rd meeting on October 5, 2022.

The decision was driven by market sentiments and the need to adhere to proactive and preemptive strategies to ensure market stability.

A communique at the end of the meeting said participating countries reiterated their readiness to meet at any time and take immediate additional measures to address market developments and support the balance of the oil market and its stability if necessary.

Also, the participating countries decided to further endorse the resolutions during the 19th meeting on July 18, 2021 and the 33rd meeting on October 5, 2022.

The resolutions included the adjustment of the frequency of the monthly meetings to become every two months for the Joint Ministerial Monitoring Committee (JMMC) and the authority of the JMMC to hold additional meetings, or to request an OPEC and non-OPEC Ministerial Meeting at any time to address market developments, if necessary.

The meeting reiterated the critical importance for members to adhere to full conformity and compensation mechanism by taking advantage of the extension approved on the 33rd OPEC and non-OPEC Ministerial Meeting.

Sylva said Nigeria would continue to work hard to ensure it met its OPEC crude oil production quota Apart from efforts to improve on the security along the tracks of the major crude oil pipelines, the Minister said the Federal Government would also continue to block every leakage through which crude oil are stolen by oil thieves and pipeline vandals.

He noted that the inability of Nigeria to meet the current OPEC quota was not due to lack of production capacity on the part of crude oil producers, but because a lot of producers decided not to inject into the pipelines since they were losing a lot of their productions when they inject into the pipelines”.

“Once we are able to build enough confidence in the security of the pipelines, they (producers) will then be able to inject into the pipelines once again. Once that happens, we will be able to meet up with our OPEC quotas. That is where we are going and the early signals are there that we are making very good progress,” the Minister said.

“Our pipelines have issues and we put security structures in place involving the communities, the security agencies, oil companies and government and we are beginning to see some early signs of improvement.

“Our production, for example, improved from where we were in the past. We are producing over a million barrels now, and we believe that when we have built confidence enough on the pipelines and all the producers begin to inject into the pipelines that have been secured, we will be able to produce quickly to meet our OPEC quota.

“That’s really our plan and I am hoping that before the exit of this administration, we should be able to meet our OPEC quota” the minister said.

The minister noted that with the current rehabilitations of the Port Harcourt, Warri refineries as well as the planned fixing of the Kaduna refinery and the coming on stream of the Dangote Refinery, Nigeria was sure of guaranteed crude production that will ease the incessant fuel crisis faced in the country.

He said between Port Harcourt, Warri and Kaduna, there were over 410,000 barrels, and if all that were refined in-country, it would be at least half of our consumption.

With Dangote refinery expected to come on stream by first quarter next year, he said the country was expecting that we will actually be exiting the importation of petroleum products by third quarter of next year.

“But I believe that even before the third quarter of next year, we should be able to exit the importation of refined products then,” he said.

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also

CBN pushes further Nigeria’s electronic payment system, unveils “AFRIGO”

In another significant move to strengthen the national payments system and deepen the usag…