President Muhammadu Buhari on Monday said the unbundling of the Nigerian National Petroleum Corporation was part of strategies aimed at repositioning the country’s oil and gas sector, and announced a daily crude oil production target of 2.8 million barrels per day.
The President, in a bid to woo investors to the country, also announced that Nigeria had overcome the security challenges hitherto posed by Boko Haram terrorists and extremists in the North-East.
Buhari spoke in Abuja through Vice-President, Yemi Osinbajo at the 6th African Petroleum Congress and Exhibition, which had the theme: ‘Positioning African Petroleum for Global Development and Value Addition’.
He told guests at the event that as part of strategies to reposition the oil industry, his administration had commenced the process of implementing carefully conceived initiatives.
He said, “Some of these include strengthening the institutional framework on policy formulation through legislation on the Petroleum Industry Bill as a prerequisite for the development of the sector and attraction of foreign investment; unbundling the national oil company, that is the Nigeria National Petroleum Corporation, into lean, efficient and profitable components that will operate as a business venture and deploy existing manpower to areas of competences without attendant job losses.
“Others are to develop stronger policies on local content so as to reduce the high cost of production of machine components, services and capital flight in the industry; reduce production costs and encourage efficiencies in oil exploration so as to achieve a 30 per cent increase in daily production levels (to about 2.8mbpd); expand oil and gas exploration into new fields that have discoveries in commercial quantities in the North-East (Lake Chad Basin) and coastal states (Lagos); reduce gas flaring through Joint Venture contracts that will expand infrastructure; and deploy LNG for domestic and industrial uses.”
Nigeria currently produces about 2.3 million bpd of crude oil, according to the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu.
The President urged investors at the gathering to consider investing in Nigeria, as he assured them that the country was safe for their investments.
Buhari said, “I am pleased to announce that as a result of regional cooperation and the doggedness of our armed forces, Nigeria has overcome the security challenges hitherto posed by terrorists and extremists in the northeast.
“Nigeria is, therefore, ready and accessible for investments from all interested countries, individuals and partners. Let me assure you that your investments are secured in Nigeria and a high return on investment is assured.”
The President also told delegates at the congress that if Africa must meet her future energy needs, the development of a robust gas infrastructure must be jointly addressed.
He stated that currently Nigeria had the seventh largest gas deposit in the world and the best quality, which is rich in liquids and low in Sulphur.
“Reserves are put at over 185 trillion cubic feet and undiscovered reserves estimated at 400 TCF, with a capacity to peak to 600 TCF. Nigeria has established the Nigeria Gas Company to provide gas transportation to newly established power plants and to facilitate domestic energy supply,” Buhari added.
He, however, stated that in processing Africa’s hydrocarbon resources, environmental issues must be accorded high priority.
Buhari noted that globally, over 150 billion cubic metres of associated gas were being flared annually, adding that of this figure, Africa was flaring an estimated 40 billion cubic metres annually.
The President said, ”In Nigeria, gas flaring amounts to about 23 billion cubic metres per annum in over 100 flare sites, constituting over 13 per cent of global gas flaring.
“Nigeria is a member of the World Bank Global Gas Flaring Reduction Partnership and with the support of our legislature, we will sign the United Nations Agreement of ‘Zero Routine Flaring by 2030’ although our national target is 2020. I urge all member countries to set realistic targets for gas flare-out in the region.”
Speaking to journalists on the sidelines of the event, Kachikwu said African countries would continue to collaborate on issues regarding oil and gas prices.
He said, “It is a new dawn for Africa and we are excited about the development. We will continue to work collaboratively, because there is a lot happening in the space but also a lot of challenges that we have to overcome.
“The major challenge is funding. Obviously, skillsets are there already and technology is not an issue, but funding remains key. Policies are also key because African governments have to develop policies that will enable backward integration into their own systems.”