…says IOC’s divestment should be concluded
The Independent Petroleum Producers Group (IPPG) has called for urgent measures to be undertaken by all relevant stakeholders to immediately arrest the dwindling production level and under-investment in the oil and gas industry.
IPPG also urged the stakeholders to focus on four priority areas that will ensure that Nigeria production level would commensurate to the two million barrels per day production level: It therefore advocated for four priority areas that should be addressed.
The Priority Area 1: The immediate conclusion of all pending IOC divestment transactions: IPPG strongly advocates that our member Companies – Seplat, the Renaissance Consortium and Oando – have the proven track record to successfully take over and manage these onshore and shallow water assets to realise incremental production in the region of 100,000 – 200,000 barrels of oil and over 1.5bcf of gas per day within 24 months and well over 500,000 barrels of oil per day in the long term. IPPG believes the timely approval of these IOC divestment transactions will also be a clear signal capable of restoring global investor confidence in Nigeria in an era of competing global investment destinations in Africa and very limited access to capital.
Priority Area 2: The urgent need to address deepwater development and production: Untangling issues around deepwater development, particularly in terms of competitive fiscal regime being negotiated with Shell, Total Energies, ExxonMobil and Chevron, has the potential to unlock incremental production of 700,000 barrels per day from this terrain in the short to medium term. Enabling deepwater development will attract significant economic benefits as Nigeria has one of the world’s largest untapped deepwater resource base.
Priority Area 3: The adoption of a national value-retention strategy:
Nigeria’s domestic crude oil refining and petrochemical capacity must be sustained primarily from our domestic crude oil and gas production in order to transform our country into a net exporter of refined petroleum and petrochemical products that will lay a strong foundation for the rapid industrialization of the Nigerian economy. It is therefore imperative to grow our daily production to 2.5 million barrels of oil and 10 bcf of gas in the near to long term to ensure we are able to meet our domestic refinery and petrochemical demands and export commitments to generate the much-needed foreign exchange earnings for macro-economic stability.
Priority Area 4: The development of Nigeria’s gas resources to catalyse economic growth and complement decarbonisation drive: Nigeria’s vast gas resources must be exploited with immediate focus placed on restoring production to existing installed LNG capacity and expanding production (FLNG). In addition, we must expand domestic gas utilization (Gas-to-Power; Gas-Based Industries) by investing heavily to address the gas infrastructure deficit facing us today. The International Oil Companies will lead the charge on export gas while IPPG members will drive the domestic gas agenda led by NNPCL
“These priority areas provide the most realistic and sustainable pathway towards meeting our national long term production aspiration of 4 million barrels of oil per day and 13 billion cubic feet of gas per day. Consequently, as a matter of national importance, Nigeria must act fast and hasten the pace of recovery across the entire industry, even if it means Mr. President declaring a state of emergency in the oil and gas sector! We must be seen to do everything possible to unleash the industry. Unlocking this incremental production is achievable only through collaboration and commitment between the industry regulators (NUPRC and NMDPRA) and industry operators (NNPCL, OPTS and IPPG) and this must be done for the sake of our country.”