Aiteo to invest $4bn for business diversification, cost reduction

Aiteo, an indigenous Nigerian energy firm, on Thursday said it is planning an investment of $4 billion in order to boost production, cut operational cost and entrench its current drive for business diversification.
Chike Onyejekwe, who is the group managing director (GMD) of the company, stated this while participating in a panel discussion at the Nigeria Oil and Gas Conference, which ended Thursday in Abuja, the Nigerian capital.
He also said that the $4 billion investment will help to revamp aging assets, ensure asset integrity, as well as security of evacuation.
“We are looking at about $4 billion investment in the medium term, so you can see that this is an aggressive step and we are not saying we are going to expend it in a day or one year but it is phased over a targeted period,” Onyejekwe explained.
According to him, “we also have to look at infrastructure because this is an indigenous asset and asset integrity is key, and we are expecting that we will continue to look at this on a regular basis.”
Aiteo group is an integrated Nigerian energy conglomerate founded in February 2008, and is the successor entity to Sigmund Communnecci Limited.

Onyejekwe said Aiteo, which is now producing 90,000 barrels of crude oil per day, had the leadership and technical experts in these various brackets that are looking to ensure that this target set by the company is achieved.
“Since cost is becoming a major issue, we are also taking cost into consideration and looking for ways to reduce losses and ensure flexibility of evacuation,” he said.
At about $26 to $27 per barrel, the Nigerian oil and gas industry is said to have one of the highest production costs in the world, a situation that Ibe Kachikwu, the nation’s minister of state for petroleum insists must change.
In his words, “we must be bold enough to take steps to reduce the cost of production, as average cost of production for joint ventures in Nigeria is about $26, $27 per barrel. That absolutely has to come down within the $15 mark. It is a tough order but it is something that we must work on.”
Nigeria is ranked 11th in the world overall for oil production capacity and in 2010 produced roughly 2.45 million barrels but was hit by militancy, crumbling production levels by more than half before rising up again to the current 2.1 million barrels a day (mbd) following the federal government’s sustained peaceful overtures to militants in the Niger Delta.
Aiteo says that through aggressive exploration and innovative extraction techniques, it will continue to keep the oil flowing for an energy-hungry world.
The deep water basins off the shores of West Africa represent an important source of new oil at a time when many conventional sources are becoming more challenging to develop.
Deepwater exploration is particularly expected to take Nigeria’s proven oil reserves above 40 billion barrels by the middle of the decade, but oil retrieval is estimated to bring the figure down to less than 28 billion barrels by 2021, according to data sourced by BusinessDay from Aiteo.
This looks especially possible considering Aiteo’s position that “our joint venture with IS45 energy has produced more than a highly complementary partnership, and we are devoted to responsibly developing energy resources in some of the world’s most significant basins, including the Niger Delta basin and the Benue Trough.”
According to Onyejekwe, Aiteo’s workforce is truly indigenous, with its local content showing that Nigerian firms have the skills and capacity to operate successfully and sustainably in the nation’s oil and gas industry.