Inadequate and low investments into oil assets have driven the Nigerian Petroleum Development Company (NPDC) into low and declining equity production in its joint venture reserves with international oil companies (IOCs) operating in the country.
Ibe Kachikwu, the minister of state for petroleum resources, stated this on Tuesday during an interactive session with members of the National Assembly in Abuja.
In a presentation titled “The Roadmap for Nigeria’s Oil and Gas Sector,” Kachikwu noted that the average national oil production as at July 2015 stood at 2.1 million barrels per day and that the equity production from NPDC was a paltry 99,000 barrels per day.
The issue of funding constraints, the minister said, must be urgently addressed going forward, especially with the collaboration of the private sector and international investors into the nation’s petroleum industry.
He also informed that the average gas to power generation is currently estimated at about 3,000 megawatts, in addition to a domestic gas supply of one billion standard cubic feet (scf) and with the contribution of 600 million standard cubic feet from NPDC.
On the current state of the nation’s refineries, Kachikwu confirmed that, on the basis of available reports before him, two of the refineries may be re-streamed before the end of December 2015.
He further added that his ministry is currently making efforts to engage private investors for the construction of new refineries within the old ones in order to enable them share power, pipelines and other resources necessary for their sustainable optimum, and profitable performance.
According to the minister, the new agenda for the Nigerian oil and gas industry is centered on having the right people, doing the right things, at the right time, for the right purpose to yield the right results.
He also said that the petroleum sector under his watch, would ensure that the Nigeria content policy would transform the oil and gas industry into a viable and central economic engine for job creation and national growth.
Kachikwu said he was obliged to cancel the Offshore Processing Agreements (OPAs), the crude-for-products-exchange arrangement, popularly known oil swap, and other unprofitable product and crude arrangements, all in a bid to avoid rent seekers and add value to the Nigerian hydrocarbon asset base to the greater advantage of the national economy and the Nigerian people.
On the downstream sector, the minister said he strongly advocates for the introduction of a private sector model that would reinvigorate the efficient supply and distribution of petroleum products, especially in the area of pipeline assets.
According to him, the menace of pipeline vandalism has led to huge losses of crude and petroleum products, even as about 27, 967 incidents of pipeline vandalism were recorded in the last few years.
He further noted that unutilised pipelines and poor pipeline integrity also led to high cost of trucking and impact on the roads.
Responding, the house committee chairman on petroleum downstream, Joseph Akinlaja, urged the minister and his team to ensure a seamless flow of premium motor spirit otherwise known as petrol during the yuletide season.
On his part, the house committee chairman on gas resources, Agbedi Frederick, thanked the minister for his presentation and assured him of the readiness of the National Assembly to support the Federal Government in its renewed drive to transform the oil and gas sector for the better.
YANGE IKYAA
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