*100 rigs required for achieving 2017 budget target
17 September 2016, Sweetcrude, Lagos — Limited infrastructure, drop in crude oil production, funding and crisis in Nigeria’s oil-rich region, Niger Delta is said to have truncated fresh investment in Nigeria’s oil and gas industry.
Chief Executive Officer, Oilflows Services Nigeria and Vice President, South-South Chamber of Commerce, Mr. Lucky Akhiwu said there are not enough infrastructures to push investment in the oil and gas industry. This according to him is a big challenge.
In addition to limited infrastructure to drive investment in the industry, Akhiwu said that there are not Joint Ventures, JV in gas noting that it is practically difficult for International Oil Companies, IOCs to make any investment in gas.
Stating the reason why there are JV investments in gas, the Oilflows CEO said it is due largely to the long contracting circle in the country.
“Some contracts can take three years and that is not good for our economy in oil and gas,” he said.
On funding, he continued: “We also have an issue with under-funding where the government is not keeping to their own position of cash calls to the IOCs which has caused lots of bottleneck in projects.
Commenting on the effect Niger Delta crisis has had on oil production, Akhiwo said it has cut oil production by half from 2.2 million barrels per day to 1.4 million noting that military approach is not the best options to address militancy in the region.
“I think the government needs to come to the table quickly to resolve this issue so that the 2017 budget affected, and if they want to go by their indices in achieving three million barrels per day output.
“Today we just have six drilling rigs at the moment and we need a minimum of 100 drilling rigs drilling at a time and for me, this is not going to happen with this space.
“The 2.2 million barrels target for 2017/2018 medium term expenditure is not achievable because we need a minimum of 70 to 100 drilling rigs drilling at the same time to achieve that but at the moment we only have six drilling rigs plus the issue in the Delta. As it is, we have less 800,000 crude oil, we are not making progress, there are no activities, as we speak there is no single project going on in the oil and gas,” he said.