…Kachikwu urges investors’ focus on capturing local market
21 March 2018, Sweetcrude, Abuja – Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said one of the long-held aspirations of Nigeria in the upstream oil and gas sector is to grow its crude oil reserves to 40 billion barrels and production to 4 million barrels per day (bopd).
He made this known on Tuesday in Abuja at the ongoing symposium on Petroleum Industry Governance Bill, PIGB, organised by the Nigerian Extractive Industries Transparency Initiative, NEITI.
According to Kachikwu, in order to achieve growth in the country’s crude oil reserves and daily oil production, reforms such as overhauling of the multiple laws governing exploration and production which will help Nigeria reach these goals were necessary.
Nigeria’s crude oil reserves have remained stagnant for over ten years at 37 billion barrels.
The country’s daily crude oil production, which once hovered around 2.2mbp/d and 2.8mbp/d, recently dropped sharply to around 1.7mbp/d.
The government has cited constant vandalism in the Niger Delta region, oil theft, lack of investment, and aging oil and gas pipelines as cause of the decline in production.
The PGIB, which has been pending for thirteen years at the National Assembly, was eventually split into four parts, with the governance aspect passed by the 8th National Assembly. It is awaiting presidential assent for implementation.
When eventually passed into law, the bill aims to put in place an effective institutional framework, set up structures for establishment of commercially-driven petroleum entities while also promoting transparency in the administration of Nigeria’s petroleum resources.
Kachikwu maintained that it was becoming clearer that Nigeria has to “reduce” cost of production for it to be competitive in the modern low oil production world, by “tweaking” the existing industry laws, coming up with new legal, institutional and commercial framework that will libralise the petroleum industry, as well as create a competitive business environment to enhance revenue.
Kachikwu said that with North America becoming more self-reliant in energy, Europe’s technology with regards to alternative energy and China maintaining a grip on the natural resources of the African continent, Nigeria’s opportunity to benefit maximally from the petroleum industry is narrowing.
“It’s clear that the shale play revolution is gradually changing the geopolitics of oil, with ripple effects likely to linger on for years which could have serious global implication if we don’t put our house in order,” he said.
He called on stakeholders in the Nigerian oil and gas sector to grow gas-based industries and start looking inwards by “capturing the Nigerian market rather than searching for foreign market”.
“Domestic utilisation of our gas resources will help Nigeria grow its local manufacturing sector which will also have a multiplier effect on employment for our teeming population which has been a serious concern in the country”, he stated.