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  • AEC warns against disruptive probes in oil industry

    AEC warns against disruptive probes in oil industry

    The African Energy Council (AEC) has said that the series of media trials, probes and investigations in oil and gas are stifling the growth and development of the sector.

    The council, in a statement, warned that the recent allegations and investigations involving the leadership at the Nigerian National Petroleum Company Limited (NNPCL) highlight the urgent need to step back and reassess national priorities.

    Last week, an online media reported a group protest calling for the probe and prosecution of NNPCL’s former Group Chief Executive Officer (GCEO), Mallam Mele Kyari. 

    The coalition later made a U-turn and withdrew all allegations, saying it no longer wants Kyari investigated.

    AEC, however, said it believes that this is a critical moment for Nigeria’s oil and gas sector — one that demands unwavering focus, strategic execution, and long-term vision.

    It said: “As headlines once again turn to allegations and investigations involving leadership at the Nigerian National Petroleum Company Limited (NNPCL), there is an urgent need to step back and reassess national priorities.

    “This is not the first time Nigeria has faced a wave of high-profile probes in the petroleum sector. From the widely publicised cases involving former Minister Diezani Alison-Madueke to the arrest of former NNPC GMD Andrew Yakubu, Nigeria has, over the past two decades, launched numerous investigative efforts.

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    “Yet, despite the media attention, these efforts have done little to fundamentally shift sector performance, governance quality, or investor sentiment.”

    Rather than engage in needless probes, the Council advised that there is a need to focus such energy on boosting oil production in line with the budget parameters.

    It added: “Today, Nigeria’s production levels remain fragile, fluctuating between 1.4 and 1.6 million barrels per day, well below both its 2 million bpd budget benchmark and OPEC quota.

    “Meanwhile, the country’s four state-owned refineries—intended as a cornerstone of national energy security—have continued to underperform, despite years of rehabilitation attempts and expenditures exceeding ₦4tn.

    “The challenge before Nigeria is not simply one of accountability, but of institutional delivery. At a time when global capital is becoming more selective, and the energy transition is reshaping upstream investment strategies, Nigeria cannot afford to be distracted by reactive cycles.

    “The implementation of the Petroleum Industry Act (PIA) is still in early stages, and its success hinges on stable leadership, clear policy direction, and results-driven reform.

    “The AEC therefore urges a realignment of national attention toward outcomes that will tangibly benefit the Nigerian people.”

    It called for reforms to boost oil output back above two million bpd to maximise fiscal resilience and foreign exchange earnings, completing refinery rehabilitation to reduce import dependency and reclaim value along the downstream chain, and restoring confidence among investors and international partners through regulatory consistency and institutional continuity.

    It also added that there is a need to enhance transparency and governance without sacrificing operational momentum.

    “This is not a dismissal of the need for oversight or reform. But the country must be cautious not to mistake movement for progress.

    “A sustainable future for Nigeria’s energy sector will not be built in courtrooms—it will be built in control rooms, boardrooms, and drilling fields,” the statement added.

  • A new era beckons for Nigeria’s oil industry amid current issues

    A new era beckons for Nigeria’s oil industry amid current issues

    Despite ongoing midstream and downstream challenges, Nigeria’s oil industry has significantly boosted crude production, enhanced security against theft and vandalism, and improved refining capacity

    Nigeria’s oil industry, long a cornerstone of its economy, stands on the brink of a transformative era. As the nation grapples with a myriad of persistent issues, including declining production, rampant theft and infrastructural deficiencies, a new chapter is emerging. This potential shift offers a chance to revitalise the sector and reshape Nigeria’s economic landscape. However, realising this promise will require addressing entrenched challenges with innovative solutions and strategic reforms.

    Before President Bola Tinubu’s cabinet took office on May 29, 2023, Nigeria’s crude oil production was rapidly declining due to rampant theft, insecurity in the Niger Delta, and low investment levels. The situation was exacerbated by International Oil Companies (IOCs) divesting from the sector, compounded by the global energy transition movement, which further stifled investment. Amid these challenges, the country faced an urgent need to boost production volumes. This was the pressing reality in the upstream oil sector.

    In the midstream sector, illegal refineries in the oil-rich Niger Delta were causing significant issues. The downstream sector faced severe shortages of petroleum products, particularly Premium Motor Spirit (PMS) or petrol. With only a handful of modular refineries producing Automotive Gas Oil (AGO), Household Kerosene, and Naphtha, there was a pressing need to increase domestic refining capacity, whether through national or private refineries. The Petroleum Industry Act (PIA) had fully deregulated the sector, intensifying calls to eliminate subsidies on petroleum products.

    When President Tinubu swore in Senator Heineken Lokpobiri as Minister of State for Petroleum Resources (Oil) on August 21, 2023, the oil industry was grappling with significant challenges. The sector was plagued by declining crude oil production, illegal refineries in the Niger Delta, and severe shortages of petroleum products. On assuming office, Lokpobiri pledged to address these issues head-on, stating, “Go and ramp up crude oil production,” which was the key directive he received from the President.

    Consequently, Senator Lokpobiri committed to being a frequent presence in the creeks—the heart of oil exploration and production—rather than operating remotely from Abuja. In his inaugural speech, he emphasised his hands-on approach: “I am here to work with the agencies to increase production on a sustainable basis… Even if you speak grammar from now to tomorrow, you won’t increase production; you have achieved nothing. You are the experts. I am here to provide the leadership so that we can go to the creeks. I am not going to spend more time in the office; I am going to spend more time in the fields so that we can achieve results.”

    Under Lokpobiri’s leadership, the Ministry of Petroleum Resources has faced significant challenges in reviving Nigeria’s struggling crude oil industry. When Lokpobiri took office, the industry was at a low point. Despite Nigeria’s capacity to produce up to 2 million barrels per day (mb/d), actual production had plummeted to just 1.181 mb/d in August 2023. This shortfall not only tarnished Nigeria’s reputation as Africa’s leading crude oil producer but also had a severe impact on national revenue.

    The industry was plagued by numerous issues, including illegal refineries in the Niger Delta, widespread theft, and insecurity, which hindered production efforts. Additionally, the downstream sector was grappling with critical shortages of petroleum products, further exacerbating the situation. Despite various measures to boost output, these efforts were largely in vain, leading to substantial financial losses for the country. Lokpobiri’s approach to addressing these problems involved a commitment to being present in the field rather than working remotely from Abuja. He emphasised his intent to provide hands-on leadership and focus directly on the creeks, the heart of oil exploration and production, in order to achieve tangible results and restore the industry’s performance.

    Read Also: MOSIEND lauds Lokpobiri leadership in revamping oil industry

    Oil theft, pipeline vandalism, and illegal refining became glaring issues in the Niger Delta, reflecting the severe challenges facing the industry. High-profile investors like Tony Elumelu had previously raised alarms about Nigeria losing up to 95% of its crude oil production to theft, urging the government to expose those responsible. Despite efforts by security operatives to curb these illegal activities, illegal refiners continued their operations unabated. The perilous nature of their trade, which claimed many lives, only seemed to enhance the allure and profitability of their illicit activities.

    In essence, revitalising the oil industry to protect lives, the environment, and property was one of the most pressing issues confronting Senator Heineken Lokpobiri’s ministry. The Herculean task involved tackling the pervasive problems of oil theft and illegal refining, which required identifying and apprehending those involved in bunkering and illicit sales of crude at every stage of production. Ironically, accountability also posed a significant challenge, as the industry reportedly suffered from inadequate metering at wellheads and terminals, complicating efforts to monitor and manage production effectively. These formidable challenges were central to the mandate faced by Lokpobiri’s ministry as it sought to restore integrity and functionality to Nigeria’s oil sector.

    To address the urgent issues facing Nigeria’s oil sector, Senator Lokpobiri needed to act swiftly. Recognizing the necessity for a coordinated response, President Tinubu assembled a high-level delegation for a physical assessment of the battle against crude oil theft on August 26, 2023. The delegation included National Security Adviser Mallam Nuhu Ribadu, who led a comprehensive security team comprising the Ministers of State for Defence, the Minister of Defence, the Minister of State for Petroleum Resources (Gas), and the Permanent Secretary of the Ministry of Petroleum Resources. Also present were the Chief of Defence Staff, the Chief of Air Staff, a representative of the Chief of Army Staff, the Commander of Operation Delta Safe, a representative of the Director General of the Department of State Services (DSS), and the Special Adviser to the President on Energy. This collaborative effort aimed to address the multifaceted challenges plaguing the oil industry and enhance security measures in the Niger Delta.

    From the petroleum sector, the delegation included Mallam Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Engr. Adokiye Tombomieye, Executive Vice President Upstream, and Mr. Bala Wunti, Chief Upstream Investment Officer. The team engaged with key stakeholders, such as the management of Tantita Security Services Limited, which has been instrumental in pipeline protection in the Niger Delta. After inspecting illegal facilities in Delta State, Lokpobiri emphasized the Tinubu administration’s commitment to eradicating pipeline vandalism and oil theft. He stated, “We are here because of the problem of pipeline vandalism and illegal bunkering that is ongoing in the Niger Delta.”

    To address the persistent issues of pipeline vandalism and oil theft, Senator Lokpobiri acted on his promise by venturing directly into the creeks. He traveled to Bayelsa State, where he engaged with local traditional rulers to seek their support in combating these challenges. Lokpobiri paid a visit to the Pere of Ekpetiama clan and Chairman of the Traditional Rulers’ Council of Bayelsa State, King Bubaraye Dakolo, to emphasize the importance of collective action against pipeline vandalism. He also met with the King of Nembe Kingdom and former Minister of Petroleum, Edmund Daukoru, focusing on collaborative efforts to enhance pipeline security and tackle illicit activities. Additionally, he sought the cooperation of the Pere of Kumbowei Kingdom, Boloye Embareba, to bolster security and improve oil production in the region.

    In addition to these meetings, Chief of Defence Staff General Christopher Musa also visited the Minister of State for Petroleum Resources in Abuja to discuss strategies for curbing insecurity and boosting oil production. The efforts seem to have borne fruit a year later. Although Nigeria has yet to meet its Organization of Petroleum Exporting Countries (OPEC) quota, significant progress has been made. According to a report from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the number of oil rigs in the country had risen to 24 by June 2024, up from just 10 rigs previously. Engr. Gbenga Komolafe, the commission’s Chief Executive Officer, highlighted this improvement, noting, “As of June 2024, compared to 2022, when we had about 10 rigs, we now have approximately 24 rigs in the industry.”

    Engr. Komolafe also reported that Nigeria’s total crude oil and condensate reserves reached 37.50 billion barrels as of January 2024, marking a 1.4% increase from 36.96 billion barrels a year earlier. The industry has demonstrated a sustained improvement in performance, particularly in daily production. Last week, Mrs. Oritsemeyiwa Eyesan, Executive Vice President of Upstream at NNPCL, announced that crude oil and condensate production had surged to 1.7 million barrels per day (mb/d) in August. Additionally, she highlighted a successful reduction in production costs from $34 per barrel to $30 per barrel.

    In a notable development, Slumberger, which had previously exited the Nigerian market, returned in May 2023 to undertake a significant drilling project involving 100 wells, an investment worth billions of dollars. This marked a significant return to the Nigerian oil sector after a 12-year absence, as noted by Lokpobiri. “This morning, I was with a company and that company alone is saying they are happy (Schlumberger is back to town) and they have a drilling programme of drilling a 100 wells. You know what that means? That will be another major investment that will attract billions of dollars,” he said.

    In the midstream sector, the long-awaited production of petroleum products, particularly Premium Motor Spirit (PMS), from domestic refineries remains a key focus. Although domestic refineries are still primarily engaged in basic refining processes, there is notable progress. The Dangote Petroleum Refinery, with its capacity of 650,000 barrels per day, has commenced production of diesel, naphtha, and Jet A fuel. The refinery not only supplies these products locally but also exports to international markets, marking a significant milestone in both global and national refining history. Expectations are high that the refinery will soon start producing PMS.

    The enabling environment fostered by the Ministry has played a role in this achievement, with efforts underway to address the plant’s major challenge of feedstock shortages. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is enforcing the domestic crude supply obligation to ensure oil producers deliver the necessary crude oil to the refinery. Additionally, President Tinubu has directed that feedstock transactions be conducted in Naira, further supporting the industry.

    State-owned refineries are also showing signs of improvement. Despite public anxieties, progress is being made. Last week, Engr. Dapo Segun, Executive Vice President Downstream at NNPCL, revealed that the 60,000-barrel Port Harcourt Refinery is expected to receive approval for product distribution by September 2024. The refinery’s Crude Oil Distillation Unit (CDU) has been operational since early August, and while the plant is still not producing off-spec products for public distribution, it is progressing toward certification by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

    The lack of functional domestic refineries has previously hampered the industry, leading to reliance on imported products and sporadic shortages of PMS. However, the recent advancements in refining capacity signal a positive shift towards greater self-sufficiency in petroleum product production.

    During the period under review, the oil sector, guided by Lokpobiri, has achieved notable growth in the upstream segment. Despite persistent challenges in the midstream and downstream sectors, his leadership has driven substantial progress in the industry. This success, however, demands a continued, relentless effort to overcome any obstacles that might impede further advancements. The battle against issues like oil theft, pipeline vandalism, and inefficiencies in refining must persist to build on this success and ensure the sector’s continued improvement and stability.

  • Reps begin probe of lack of crude supply to local refineries, sharp practices in oil industry

    Reps begin probe of lack of crude supply to local refineries, sharp practices in oil industry

    The House of Representatives has commenced a forensic investigation into the importation of adulterated petroleum products into the country and the non-supply of crude oil to local refineries.

    A joint Committee of the House on Midstream and Downstream are carrying out the investigation which is expected to address some sharp practices in the industry.

    Declaring the investigation open, Speaker of the House, Hon. Abbas Tajudeen said the parliament is determined to ensure that the petroleum products brought into the country are of the best quality, while local refineries should be able to get quality crude for their operations.

    Represented by his Deputy, Hon. Benjamin Kalu, the Speaker said the investigations will delve into the complexities surrounding the importation of adulterated petroleum products, the difficulties of our domestic refiners in accessing crude oil feedstock, especially our modular refineries, and the broader threats these issues pose to Nigeria’s energy security.

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    He said: “The resurgence of fuel queues at petrol stations, the increasing cost of Premium Motor Spirit (PMS), and the unavailability of crude oil feedstock for our downstream domestic refineries are of particular concern. The investigation will also extend to other related issues impacting the sector.”

    The Speaker said further that the quality of petroleum products imported into Nigeria has come under scrutiny, adding that the House must ensure compliance with global standards.

    He said the Nigerian Midstream and Downstream Petroleum Regulatory Authority

    (NMDPRA) and the Standards Organization of Nigeria (SON) must guarantee that all petrol imported into the country is rigorously tested in laboratories to ensure that it meets the standard sulphur and octane levels.

    He said: “It is unacceptable that the petrol imported into the country contains high sulphur levels, is led, and has low octane levels – as experienced in the recent past that even led to socio-economic losses on a national scale including the knocking down of the engines of vehicles of Nigerians in their hundreds.

    Abbas said further that In carbon control economies, maintaining high octane levels is a significant regulatory issue for both energy regulators and environmental protection agencies as the lower the octane level, the cheaper the cost of refining.

    He however that this should not be at the expense of quality and environmental standards.

    He emphasised that the role of regulatory bodies such as the Standards Organization of Nigeria (SON), the National Environmental Standards and Regulations Enforcement Agency (NESREA), and the NMDPRA is pivotal in ensuring that the petrol consumed in Nigeria is environmentally friendly grade.

    He said: “One critical aspect we must address is the infrastructure for quality assurance that enables robust testing of petroleum products with the standard practice for manual sampling fully adhered to. It is expected that the joint committee on this nationally important assignment will carry out investigations on the quality and the number of laboratories that both the NMDPRA and SON have or use for their tests and return with actionable feedback.

    “As for the difficulties encountered by domestic refiners in accessing reliable supplies of crude oil feedstock for their refineries, it must be reiterated that President Bola Ahmed Tinubu is fully committed to providing a level playing ground for producers and refiners to do business in the industry.

    “I also implore the Joint Petroleum Committees on Midstream and Downstream sectors to work toward convergence between the Domestic crude Oil Supply Obligation and the nation’s energy security as it works with the sector regulators to re-engineer their respective regulatory processes to address the challenges.

    “I firmly advocate for further high-level engagements, studies, and in-depth analysis to dive into other pressing questions concerning local crude oil refining dynamics in Nigeria. This endeavour is pivotal in providing a comprehensive roadmap and policy suggestions that address the concerns and interests of government entities, businesses, and households alike.

    “Let us move forward with a shared sense of purpose and determination to ensure that Nigeria’s energy sector operates at the highest standards of quality, efficiency, and environmental sustainability.

    The chairman of the Joint Committee, Hon. Ikenga Ugochinyere recalled that the House had mandated the Committees to carry out a legislative forensic investigation into the allegation of importation of substandard products and high-sulphur diesel into Nigeria, the alleged production of substandard diesel and other petroleum products by some domestic producers.

    They also have the mandate to investigate alleged anomalies in the importation and distribution of PMS by the state oil company, the economic viability of the alleged sale of petroleum products below fair market value, and its impact on downstream and local refineries and revenue generation as well as the source of funds for such price interventions among others.

    Ugochinyere said the committees will first address allegations of the importation of substandard petroleum products and the non-availability of crude oil to domestic refineries, which has raised serious concerns about the quality and safety of fuel in our market.

    In addition, he said: “We are going to take a closer look at the integrity of the testing processes for petroleum products in the country, particularly focusing on the capacity and credibility of all the testing labs of all stakeholders in the downstream midstream value chain, local middlemen and the laboratories they employ.

    “To ensure a thorough and transparent investigation, the committee will undertake detailed laboratory investigations at all local refineries, marketers and Importers facilities, regulatory agencies, State Oil Company, and other players in the sector.

    “We will visit various filling stations, depots, and tank farms to take samples in line with international standards, verify the quality of imported products, and assess the testing capacities of all refineries and all refined product handling outfits.

    “The collection of samples will be done transparently and in line with global best practices and would be in 4 specimens for independent testing in a different standard, accredited Laboratory including that of all stakeholders involved in refining and importation of refined petroleum products.

    “Samples shall be taken in the presence of Representatives of NMDPRA, refineries representatives, Marketers/Importers, and the Committee. After collection, the samples will be tested jointly and also independently by the committee and the stakeholders to ascertain the contents. Components to be tested for as listed as follows: Sulfur Content, Density, Distillation, Flash Point, Octane number (for gasoline), and Cetane number (for diesel).

    “Out of the over 30 identified key items that will undergo our forensic investigation, we are starting with the most current issues and the recent development involving one of the refiners Dangote Refinery, and our regulatory body NMDPRA over quality of produced and imported products and the complaints by all Refining companies in Nigeria over non-availability of crude Oil Supply to all their Domestic Refineries”.

    He said the forensic legislative investigation is crucial for restoring trust and ensuring the quality and security of Nigeria’s petroleum sector in line with the FG Renewed Hope Agenda program.

    He said the committee is committed to transparency, thoroughness, and accountability throughout this process that will help us to identify and resolve the underlying issues plaguing Nigeria’s petroleum sector.

  • Ministry mulls calls for harnessing PTI’s potentials for oil industry

    Ministry mulls calls for harnessing PTI’s potentials for oil industry

    The Permanent Secretary of the Federal Ministry of Petroleum Resources (MPR), Amb. Nicholas Agbo Ella has said strengthening the Petroleum Training Institute (PTI), Effurun, in harnessing its potentials would save the nation its scarce resources of foreign training and retraining of industry personnel.

    Ella, while on a working visit to the Institute, weekend, lamented the huge loss of revenue incurred on foreign training.

    “We must consolidate on achieving the full potential in the Institute instead of creating another petroleum institute. I feel very proud that we have an Institute like this. I have said it earlier and I will reiterate that, we cannot have a Petroleum Training Institute of this magnitude in Nigeria and fail to utilise it.

    “Training is essential for all of us as individuals and as an organisation. We should be able to develop ourselves and our capacities as well as enhance our productivity. PTI has all it takes to train all oil workers in Nigeria and I don’t see why we cannot train locally in PTI and save our scarce resources,” the Permanent Secretary stated.

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    Asserting the need for colleagues in the oil and gas sector to patronise PTI, he stated, “At the Ministry level, we will push up the level of collaboration we desire. This is achievable if we unite and work as a team. We will speak with GMD of Nigeria National Petroleum Corporation (NNPC) and other sister agencies in the Ministry.

    “PTI needs to move beyond where it is presently. This is the only Petroleum Training Institute we have in the country and we will not allow it to fail in discharging its responsibility.”

    Recall that there was a recent move by the current National Assembly to establish another Petroleum Training Institute in Ibeno, Akwa Ibom State.

    The MPR Permanent Secretary however posited: “We should rather channel the resources to PTI Effurun and turn it around, so that it can perform better.

    “We don’t need to establish any other institution of this nature in Nigeria. We should work harder to enhance what we have here by improving the capacity of the personnel.

    “If people find it difficult to come down to Effurun for the training, we can actually conduct the training at the Public Service Institute in Abuja under the umbrella of PTI. PTI Certification is recognised globally, so why would I go and train my personnel in a lesser institution outside the country when we have a better and well-equipped organisation that can handle such training locally with just a little resource. Let’s work together to give maximum cooperation to the Management of PTI.”

    He further enjoined the Acting Principal Chief Executive, Engr. Dr. Samuel Onoji and the entire members of staff on professionalism, as well as encouraged the Management to create room for other programmes of studies, adding, “we want you to push harder to develop other competencies.”

  • Content Board identifies $25b investment openings in oil industry

    The Nigerian Content Development and Monitoring Board (NCDMB) has identified investment opportunities worth $25 billion in the oil and gas industry that would be tapped in the next two years.

    Its Executive Secretary, Simbi Wabote, who stated this while enumerating the benefits of the Nigerian Oil and Gas Opportunity Fair (NOGOF), which holds in Yenagoa, the Bayelsa State capital in April 4 and 5.

    The event has as its theme:  “Maximising investments in the Nigeria’s oil and gas industry for the benefit of the Nigerian people”.

    He said the first edition, which held two years ago, was able to attract investment worth $20 billion. This year’s edition, he said, is expected to attract $25 billion worth of investments.

    He said: “In the past two years we have been able to push opportunities worth about $20 billion into the oil and gas industry, citing projects such as the Shell Petroleum Development Company Limited’s (SPDC) Bonga Southwest project, Total’s Ikike project, ExxonMobil Ibot project and Agip Abo project, among others. ‘’

    Final Investment Decisions (FIDs), he said,  would be taken on these projects soon while the FID on Abo project has been taken and work has commenced on it. ” These projects were some of the investments opportunities identified and discussed with industry players at the first edition of NOGOF,” he said.

    He added:“In the next two years we are also looking at pushing opportunities worth $25billion going by the opportunities we have identified and ready to share at the oncoming fair.”

    He noted that the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010, has brought tremendous transformation in the sector, adding that the country’s oil and gas industry looks positive in spite of the changing dynamics in the global market. The dynamics have led to crude oil pricing uncertainties and the Petroleum Industry Governance Bill (PIGB) hanging in the National Assembly.

    Since the Nigerian Content Act came into effect, he said, the oil and gas industry had recorded significant FDI from pipe mills and growth in Nigerian-owned marine vessels.

    Wabote said the major focus of the Nigerian Content Law was “domiciliation” of value-adding activities. According to him, NOGOF would be a forum to share information about available opportunities to investors, who had established fabrication yards, engineering houses, pipe mills, pipe-coating yards, cable manufacturing and other facilities since the implementation of the Nigerian Content Act in 2010.

    “It is important for the investors and other stakeholders to have a line of sight to projects opportunities in the funnel so they can position themselves for the desired growth,” he said, adding that investments and service providers were stifled in the past due to lack of information on projects in the short, medium and long term.

    “In the past, by the time the opportunities come on the table the service providers will not be ready in terms of capacities to deliver the goods, hence the importance of this Fair.

    ‘’The NOGOF is a platform we want to use to share the opportunities that are warehoused by the various international operating companies and indigenous operators. This would cover upstream, midstream and downstream business opportunities. It will address access to market, so that companies will know and understand what is coming and prepare themselves.

    “NOGOF brings together major players as well service companies, industry regulators and government agencies to showcase opportunities in the industry and present available in-country capacities to all stakeholders in attendance. A copy of the compendium of Nigerian Content Opportunities in oil and gas industry will be given to every delegate to the Fair.

    “The maiden  edition, which  held in Uyo, Akwa Ibom State, last two years had over 1200 delegates, 33 exhibitors and presentation of industry opportunities, covering engineering designs, pipe construction facilities upgrade, projects in various parts of the industry, among others. The delegated extensively discussed brown and green fields’ opportunities, among others.”

    The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu will lead discussions on the available and emerging investment opportunities in the Nigerian oil and gas Industry at this year’s NOGOF.

    Nigerian National Petroleum Corporation (NNPC) Group Managing Director, Dr. Maikanti Baru and chief executives of international operating companies are  expected at the event.

  • Kachikwu urges Oando to proffer ‘creative solutions’ in oil industry

    •Minister inaugurates oil firm’s $150m Wings Office Complex   

    Minister of State for Petroleum Resources Dr. Emmanuel Ibe Kachikwu has urged oil firm Oando PLC to keep proffering creative solutions to challenges in the petroleum industry.

    He spoke yesterday while inaugurating the firm’s new office space, the Wings Office Complex.

    The complex, which is located on 17A Ozumba Mbadiwe, Victoria Island, cost about $150 million.

    Kachickwu, who hailed the company’s feat, said: “Oando has shown uniqueness as a Nigerian oil company showing support to the Government and the Nigerian populace. The building has been developed using water, sand, cement, bricks, steel, concrete, wood and glass, all are elements attributable to transparency and strength.

    “The future is very demanding; I urge you to continue to inspire and be creative in the solutions that you proffer in your sector and for the nation.”

    Four years after its ground breaking ceremony, Oando surmounted all odds to complete the world class office complex, which gives credence to the company’s resilient and daring spirit.

    Considering the skepticism associated with investing in Nigeria, more so the oil & gas sector in recent times, Oando scored the trust and support of two South African companies, RMB Westport and Redefine Properties, who put equity in the project.

    This is the first time both companies are investing in commercial property in West Africa, a development experts termed as showing the level of faith they have in the vision of the Wings project and Oando’s management team.

    Group Chief Executive, Oando PLC Wale Tinubu, said: “At Oando, passion is not only one of our core values, it drives our ambitions. The idea for the Wings Office Complex was conceived in 2009 and the build kick-started in 2013.  At the time, it seemed a lofty dream; both in terms of size and the type of structure we envisaged.  We commenced the construction of Wings at a time when the price of oil was around $100; despite the 2014 crash in oil prices to $23 per barrel, the 60 per cent devaluation of the naira and the 13-month long economic recession, we pushed on. Today, the two towers stand tall as testament to indigenous companies like Oando, which continue to lead and set the standard for excellence. The project signifies the end to a series of capital projects that we have pioneered, invested in and built.”

    Tinubu acknowledged all those who made the project possible.

    The CEO, Stanbic IBTC Capital representing the CEO for Stanbic IBTC, Funso Akere said: “Stanbic IBTC Bank PLC together with Standard Bank of South Africa is proud to have supported the completion of this landmark real estate project in Nigeria, which would catalyse the development of similar ground-breaking real estate projects and serve as a benchmark for investment grade office buildings in Nigeria.

    In addition to RMB Westport and Redefine, Oando received financing from local and international banks, specifically RMB Bank and Standard Bank in South Africa and Stanbic IBTC in Nigeria, to create this world-class office building that encompasses panoramic views of Lagos from every floor. The structure also boasts of 24-hour power, central cooling with noise minimising building acoustics and external cladding designed to limit direct solar gain.

    The Wings Office Complex is home to leading brands such as Ericsson, RMB Bank and Oando employees.

    “It was built with the intention of accommodating all our Lagos based staff, to act as our new Head Office, enabling us finally relinquish leased space in Lago,” the firm said.

    Other dignitaries in attendance at the ceremony were Tony Elumelu, Herbert Wigwe, Bola Adesola; CEO Standard Chartered Bank, Oba of Lagos Rilwan Akiolu, representatives of the Emir of Kano and Alhaji Dahiru Mangal.

     

     

     

     

     

     

     

  • OPS, marketers fault PIGB on single regulator for oil industry

    The Organised Private Sector (OPS) and oil marketers have faulted the provision of a single regulator, the Nigerian Petroleum Regulatory Commission (NPRC) in the Petroleum Industry Governance Bill (PIGB) by the National Assembly.

    They spoke jointly to reporters in Lagos yesterday. While  the OPS was represented by its Chairman, Economic Policy Committee, Manufacturers Association of Nigeria (MAN), Mr. Odiah Reginald Odiah, the Major Oil Marketers Association of Nigeria (MOMAN) was represented by its Executive Secretary, Mr. Obafemi Olawore. The Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) was also represented by its Executive Secretary, Mr. Olufemi Adewole.

    The groups told reporters that they have carefully gone through the PIGB and noted the provision of a single regulator in the bill would be counter-productive and keep Nigerians and the economy in same problems we experience today in the oil and gas industry.

    They say it has become imperative to point out the problem before the bill gets presidential assent because they learnt the National Assembly has harmonised their positions on it. Creating one regulator for the upstream and downstream sectors of the industry will be too big and the regulator will become ineffective, they argued.

    They groups said: “We need the National Assembly to create two regulatory bodies or agencies that will be independent, one for the upstream and one the downstream.”

    At the beginning of Nigeria’s oil industry, it was only one regulator that existed, the Department of Petroleum Resources, and it was not able to properly and efficiently regulate the industry, hence the creation of the Petroleum Products Pricing Regulatory Agency (PPPRA) and the Petroleum Equalisation Fund (PEF).

     

  • ‘Innovation key to Africa’s oil industry’s competitiveness’

    Sustained lower price of oil has been accepted as normal in the global oil & gas industry, with companies putting measures in place to enable a more agile response to commodity price fluctuations in the future.

    Instead of playing catch up with the rest of the world, Africa’s oil & gas industry should be learning to leapfrog and harness innovation and technology to stay ahead of the competition.

    These were the highlights of PwC’s Africa Oil & Gas Review 2017, which analysed what has happened in the last 12 months in the oil & gas industry within the major and emerging markets.

    The review, which was accessed by The Nation, said Africa’s oil & gas industry continues to face market challenges arising from the low oil price, competition for revenue growth and local talent together with new expectations from investors and regulators.

    “Africa’s oil & gas industry is experiencing significant change and upheaval. There are fundamental shifts in companies’ strategies, business models and ways of working,” PwC Africa Oil & Gas Advisory Leader, Chris Bredenhann, said.

    Bredenhann said for some, this means a diversification of portfolio, with many considering moves to an energy mix that includes some form of renewables. He said despite the challenges, there are a number of opportunities on the African continent.

    For instance, as at the end of 2016, Africa was reported to have had proven natural gas reserves of 503.3 trillion cubic feet (TcF), up one per cent in total gas reserves on the continent.

    Bredenhann added that about 90 per cent of African gas production continues to come from Algeria, Nigeria, Egypt and Libya though the overall quantity produced in 2016 reduced by 1.1 per cent down to 208.3bcm.

    He said Africa’s share of global oil production has continued its downward trend in the past four years, dropping sharply, moving down from 9.1 per cent last year to 8.6 per cent.

    According to the PwC review, the challenges in Africa’s oil & gas industry remained similar to those in previous years with uncertain regulatory frameworks, corruption, and tax requirements remaining in the top six for the past four years.

    “It is notable that financing costs and foreign currency volatility have both become more critical challenges since 2015 when they were ranked 11th and 10th respectively. It is disheartening that governments are not catching up with demands and calls from oil & gas companies to ensure regulatory certainty to players who are looking to invest in hydrocarbon plays in various African countries,” Bredenhann said.

    According to him, upstream regulation in South Africa remains uncertain, with the separation of oil & gas from mining still not achieved in the Mineral and Petroleum Resources Development Act (MPRDA).

    Other key markets in Africa, such as Nigeria and Tanzania, are also experiencing significant regulatory issues.

    The review also said corruption remained among the top three challenges over the last four years, with numerous instances occuring across the continent. It noted that despite the existence of anti-corruption programmes at government and corporate levels, the effectiveness of such programmes was questionable.

    “In the context of corruption issues, it is not surprising that the costs of finance have risen to third among major challenges for African players. It is likely that the regional issues and uncertainties combined with a constrained wider industry, have led banks and other institutions to be wary of offering favourable financing terms,” the review said.

    It further noted that the lack of skills development continues to be a problem in Africa, and it is becoming a global challenge in the oil & gas industry overall.

    The review said aside from the challenges highlighted by companies, adjusting to the new  lower oil prices remained a concern for companies.

    The oil price has been relatively ‘stable’ through 2017. Having recovered since the January 2016 low, it has typically been trading in the $50-60/bbl range.

    As the Brent oil price reached close to $60/bbl in September 2017, the market began asking whether ‘lower for longer’ may be over. The demand for oil is picking up, and supply is easing off, suggesting a market rebalancing is underway.

    The review, however, stated that as often seen with global oil prices, nothing is ever certain, adding that in response to many of these challenges, oil & gas companies are looking to alter their strategies and operating models, which has changed the competitive landscape.

  • Govt working to attract, retain investments in oil industry, says Osinbajo

    Govt working to attract, retain investments in oil industry, says Osinbajo

    The Federal Government says it is working on reforms and policies to attract and retain investments in the oil and gas industry in view of the increasing competition in attraction of capital into the sector as many African countries have become oil producers.

    The Vice President, Prof. Yemi Osinbajo, stated this yesterday at the 55th Business Anniversary event of the Oil Producers Trade Section (OPTS), an arm of the Lagos Chamber of Commerce and Industry (LCCI) in Lagos.

    Osinbajo highlighted government’s achievements in the oil and gas sector despite the challenges oil price crash posed in the last three years as well as the prevailing issues and what the government is doing.

    He said: “OPTS has a rich heritage of promoting the best interest of the upstream oil and gas sector of the Nigerian economy. It has the largest private sector investment and participant our nation. We all owe you a debt of gratitude for the positive contributions you made through the years.

    “The theme of today’s event “Nigeria: An investor-friendly destination” is in line with government’s plan of transiting to the next chapter of maximizing our resources for the development of our nation.”

    The Vice President highlighting the performance of the oil and gas industry said more than ever, Nigeria needs closer collaboration with OPEC and non-OPEC in curbing oil production. All market sentiments have improved since OPEC and non-OPEC announced output cut.

    He noted that besides oil price slump, Nigeria’s upstream oil and gas industry challenged by the menace of upstream assets vandalism, which reduce production from 2.2 million barrels per day at the beginning of 2016 to all time low of less than a million barrels per day. The situation made upstream players especially the indigenous firms suffer.

    “However, government has embarked on sustainable engagement with stakeholders in the Niger Delta and production has ramped up to 1.8 million barrels per day including condensate. The incremental production being achieved with the peace in the Niger Delta will help the government achieve a pathway towards the implementation of incorporating the Incorporated Joint Ventures (IJVs). The IJV is a new sustainable funding model that will fully take over the funding of the Joint Venture operations with the multinationals as government exits cash calls, the counterpart funding for JV projects deemed unsustainable.”

    He said government will continue to channel more energy in resolving the downstream issues once and for all, thanking the Nigerian National Petroleum Corporation for sustaining steady fuel supply nationwide.

    He commended the achievement Local Content in increasing participation of Nigerians in the oil and gas industry, adding that local participation in the sector has increased by over 140 per cent in 2016 and expressed hope it would even increase further in 2017 and beyond.

    On challenges, he said: “We, however, have challenges in the areas of security and environment, institutional capacity, funding of investments, high industry technical cost, obsolete legislation and fiscal regimes, downstream sector issues and infrastructure constraints. These factors underpin our approach and consideration in reforming and repositioning the oil and gas industry.

    Other speakers include the President, LCCI, Dr Nike Akande, Chairman OPTS and Managing Director, NNPC Group Managing Director, Dr. Maikanti Baru, Shell Petroleum Development Company and Chairman, Shell Companies in Nigeria, Mr. Osagie Okunbor, Managing Director of Total Upstream Nigeria, Nicholas Terraz, Managing Director, Seplat Plc, Austin Avuru, among other.

  • Oil industry loses $300b to price slump

    Oil industry loses $300b to price slump

    THE Minister of State for Petroleum Resources, Dr Ibe Kachikwu, has said the global oil and gas industry lost over $300 billion worth of investment in three years due to decline in oil prices.

    He stated this yesterday at the ongoing 2017 Society of Petroleum Engineers (SPE), Nigeria Council’s Annual International Conference & Exhibition (NAICE) in Lagos.

    The theme of the conference is: Building the Waves of Boom and Burst: Common Objectives Diverse Perspective.

    The minister said African countries were worst hit in the loss of these investments due to inefficiencies caused by  security issues, policy inconsistencies and infrastructure gap.

    According to Kachikwu, investors prefer to invest their scarce and limited resources elsewhere than in African countries, lamenting that  what Africa is losing, others are gaining it.

    “The situation was very challenging when it comes to losing opportunity arising from investment. For the first time in oil sector, the decline in the oil price resulted into loss of jobs.

    “Infrastructural gap is another factor that the decline in the price caused. We have Infrastructural deficit because government was responsible for infrastructure, we did not engage private sector.

    “The whole idea of new petroleum policy is to move the private sector into financing part of the project because government cannot do it alone,” he said.

    The minister said the boom and burst had become the way of life in oil and gas sector.

    “I think we have had about five circles of burst and boom over the last 35 years and each time we begin as if we did not expect it. The boom and burst has become the nature of oil and we should not be surprised anymore.

    “Over 80 per cent decline in world oil price was recorded between 2014 and 2016 with oil price falling between 25 dollars per barrel.

    “All the same, we have managed through the principles of OPEC to keep the price going between $45 and $50 per barrel.

    “For now, our expectations between the year 2017 and 2018 is to keep the price to 60 dollars per barrel,” he said.

    He however, said countries and people were moving away from oil, adding that electric motors were taking over globally.

    “In the next 20 to 25 years, oil lifespan will expire, so we just need only five years to make a change of policy in the sector.

    “We must make a traumatic decision on oil sector to survive the innovation.

    “The country needs a consistent policy and deal with inefficiency in our system to survive the trend,” he said.

    Welcoming the participants, Mr Saka Matemilola, the SPE Nigeria Council President, said the mission of the conference was to disseminate information as regard to oil and gas sector.