PETROLEUM minister Dr Ibe Kachikwu has challenged crude oil exploration and production companies operating within Nigeria to seek to raise output from the current 2.1m barrels a day to a whopping 7m barrels within the foreseeable future.
Accounting for over 90% of government revenue, crude oil is the bedrock of the Nigerian economy and the country’s annual budget is predicated petroleum. For 2019 for instance, the budget is based upon Nigeria producing 2m barrels of oil a day at a minimum cost of $60 per barrel, which is required to fund the $28.8bn expenditure and appropriation programme.
Traditionally, Nigeria has had an Organisation of Petroleum Exporting Countries (Opec) daily production quota of 2.5m barrels a day but at the height of the oil boom about 10 years ago, output rose to an all time high of 2.7m barrels a day. At the moment, Nigeria has an Opec quota of 1.68m barrels a day, which is way short of what is required to fund the budget and Dr Kachikwu has challenged the oil industry to bridge the gap.
Speaking at the Nigerian Oil and Gas Opportunity Fair (Nogof) organised by the Nigerian Content Development and Monitoring Board (NCDMB) in Yenagoa, Bayelsa State, Dr Kachikwu urged stakeholders in the petroleum industry to put all hands on deck to actualise the aspiration. He also encouraged Nigerian operators to move into other African countries and use the country’s 60 years’ experience in the sector to lead the operations of their fields.
Dr Kachikwu said: “Industry players should strive for improvements in all facets of their operations because Nigeria should be producing over 7m barrels of crude oil every day and enough gas to meet its electricity needs. The oil and gas sector should have rapidly developing infrastructure, while oil bearing communities ought to be well developed with proceeds from the sale of crude oil.”
NCDMB executive secretary, Simbi Wabote, said the board had identified over 80 oil and gas opportunities that would be developed by major international and indigenous operating companies in the short and long term, with the estimated cumulative value of $100bn. He added that the projects are contained in the Compendium of Nigerian Content Opportunities in the Oil and Gas Industry launched at the event.
These projects and opportunities cover the upstream, midstream and downstream subsectors of the Nigerian oil and gas sector and were collated from presentations by various oil and gas companies at the first edition of Nogof in 2017 and updated at workshops organised by the board in October 2018. Mr Wabote explained that the compendium was intended to create a database of Nigerian content opportunities and help indigenous and potential investors prepare, improve their capacities and capabilities to participate in available and upcoming contracts and projects.
Dr Kachikwu expressed regret that the potential of the Nigerian oil and gas sector was not being maximised and advised stakeholders to accelerate their activities because oil is a fast degenerating asset and developed countries were already switching to cleaner energy options. Over 1,000 delegates including attended the event whose theme was Maximizing the Oil & Gas Industry for the Benefit of the Nigerian People.
If Nigeria were raise her crude oil production to 7m barrels a day, she would become the world’s fourth largest producer behind the US, Russia and Saudi Arabia. At the moment, Nigeria is the world’s 13th largest crude oil producer and the sixth largest exporter.