• Tuesday, July 23, 2024
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IPPG raises concern over production decline, low investment in oil sector

IPPG raises concern over production decline, low investment in oil sector

The Independent Petroleum Producers Group (IPPG) has expressed concern over the dwindling production levels and low investment in the nation’s oil and gas sector.

Abdulrazaq Isa, chairman of IPPG expressed the concern and called for urgent action for the oil and gas sector to address the issues while presenting a keynote at the 2024 NOG Energy Week in Abuja.

Isa said despite having over 37 billion barrels of proven crude oil reserves and significant gas reserves, Nigeria’s daily production has dropped to approximately 1.3 million barrels of oil and 8.5 bcf of gas.

“Nigeria’s reserve-to-production ratio is low, indicating that the industry is in a dire situation that poses a risk to budget implementation and domestic refining capacity,” Isa said.

Against this backdrop, he said, the IPPG is calling for urgent measures to be undertaken by all relevant stakeholders to arrest the problem.

“As a matter of national importance, Nigeria must act fast and hasten the pace of recovery across the entire industry. We need swift approval of pending IOC divestment transactions,” he said.

Read also: IPPG charts path to a sustainable future for independent producers

“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 over 500,000 barrels of oil per day in the long term,” he said.

He said the second priority area is deepwater development. He said addressing issues around deepwater development and competitive fiscal regimes with major oil companies could unlock 700,000 barrels of oil per day, significantly boosting production and economic benefits.
“The adoption of a National Value-Retention Strategy is capable of ensuring that domestic crude oil and gas production sustains Nigeria’s refining and petrochemical demand and can transform the country into a net exporter of refined petroleum and petrochemical products.

“This can help generate additional foreign exchange and drive rapid industrialisation of the nation’s economy. It is therefore imperative to grow daily production to 2.5mbpd of oil and 10 bcf of gas in the near to long term,” he said.

He listed the acceleration of Nigeria’s Gas Resource Development as the final priority area.

According to him, exploiting Nigeria’s vast gas resources with a focus on restoring and expanding LNG production and enhancing domestic gas utilisation is essential.

“This includes addressing the gas infrastructure deficit and leveraging International Oil Companies for export gas and IPPG members for domestic gas agenda, with NNPCL leading the charge,” he added.

Isa said the listed priority areas are sustainable ways to meeting Nigeria’s long-term production aspiration of 4 million barrels of oil per day and 13 billion cubic feet of gas per day.