09 September 2015, Lagos – Until the Federal Government grant incentives to operators to develop existing crude oil and gas fields, the hope to escape the bitter pinch of oil glut, remains a mirage, experts stated.
Speaking in an interview with Vanguard on the way forward on the falling crude price, Former Chief Executive Officer, Niger Delta Development Commission, NDDC, Engr. Godwin Omene, stated that the oil and gas sector needs more incentive to drive it operations amidst the falling crude oil price that has gone down below the country’s budget benchmark.
He said “The way forward for the oil and gas industry is for the government to seek for more incentives to generate more funds for exploration and production activities, reduce cost of oil and gas development by working more efficiently.
“Also, there is need to carry out gas utilisation activities instead of flaring, allow indigenous companies, communities, International Oil Companies, IOCs to take gas and convert same to profitable ventures.
Omene called for the development of marginal fields that are of close proximity to existing flow stations and connect with long flow lines after signing crude handling agreement with the owners of such flow stations. “Such crude can also be sold at the manifolds to the flowstation owners” he added. He however, lauded the president for the ongoing reform at the NNPC, saying that the recent development at the corporation, is not the restructuring it clamoured for rather it is just changing of personnel.
“What is ongoing at the NNPC, is not the restructuring it needed, but it is just changing of staff. The corporation needs critical restructuring that would make it more competitive like the oil companies.
“The NNPC and its subsidiaries should be operating independently of itself and also be remitting its dividend to the Federal Government coffer directly.”
Moreover, he charged the government to further strengthen its refineries so as to enable more refine product in the country.
“The country’s refineries if properly put in place, has the capacity to refine over 430,000 barrels of crude oil per day, and 30 million liters every day.
Also speaking, Engr. Alex Neyi, CEO, Gacmork Nigeria Limited, and the Chairman, Board of Trustees, BOT, SPE, Nigeria, lamented the level of inefficiency of the country in keeping track records of trends.
He said “ the country have a bad record of not keeping tracks on trends and as a result of that we are finding it difficult to proffer adequate projections to issues when they unfold, that is why we are always caught up in the middle.
“We as a country do not take pains to check the cost of capital and operating cost, and that is why most of the project ongoing in the country today are overpriced. And this is where we are getting it all wrong.
“However, there is need to engage Nigerians in some of the projects to salvage the dollar payment syndrome which is on rampage in the country. For the naira to gain strength in the market, expatriate must be reduced to the minimum.
However, the petroleum industry should be kept off politics. That is, it should be played as thus; ‘no friends, no foe.”
Moreover, he urged the government to consult relevant stakeholders and also create a team that would be enlightened on the challenges milking the industry and encourage them to put their heads together and proffer solutions.
“Consultants could come from the universities, consultant firm, or any credible source. Even if it is from the major companies you pick the people that are relevant and it’s easy to pick them because the oil market is very small and we all know ourselves and capability.”
*Ediri Ejoh & Prince Okafor – Vanguard