The Nation Newspaper

Tag: PETAN

  • How Nigeria can raise oil output, by experts

    ANALYSTS have given an insight into how the country can increase its crude oil production from 2.3million to 2.6million barrels per day(bpd).

    According to them, it can be increased through the repair of destroyed oil facilities in the Niger Delta, production from deepwater projects, exploration of new oil wells, creation of infrastructure in oil producing areas, and passage of the Petroleum Industry Bill (PIB) and stability in the fiscal regime.

    The President, Petroleum Technology Association of Nigeria(PETAN) Mr Emeka Eze, and energy expert, Mrs Funmi Akinluyi, said when the government stabilises its fiscal regime programmes, more foreign investments would come to the oil and gas industry.

    Investors, he said, were not interested in oil and gas because they are not sure of the government’s next action and that crude oil production will increase when there more investments in the industry.

    He said the passage of PIB would quicken local content development, adding that the development would lead to improvement of indigenous capacity.

    Eze said: ‘Most Nigerian oil service companies are not well capitalised. Many oil blocks are left untapped because there is no adequate capital. Nigeria should bring more money into the sector and further grow capacity, just as Brazil and Malaysia did 10 years ago. Nigerian oil service companies have no where to go than to stay and help in improving crude oil production in the next few years,’

    Mrs Akinluyi said there should be a long-term stability in the Niger Delta to improve crude oil production.

    She said steady increase in production from two million barrels to as high as 2.6 million bpd in the future is possible if necessary mechanisms are put in place.

    “The long-term stability of the Niger Delta will remain a major factor to consider as we approach the election year, “Nigeria’s production has been plagued by years of attacks on vulnerable pipelines and platforms in the Delta, which increased in intensity from mid-2006, allowing Angola briefly to become the continent’s top crude oil producer.

    “But an amnesty last year brought a halt to sabotage attacks helping push Nigeria’s crude output above two million bpd. Production has risen gradually since the amnesty and has averaged more than 2.1 million bpd so far in the second half of the year, according to Reuters’ data, far eclipsing Angola’s planned production of 1.68 million bpd over the same period. Angola’s crude exports peaked near 1.9 million bpd earlier this year but summer maintenance and production glitches pulled this back to below 1.7 million bpd in the third quarter, according to data collected from trade sources,” she added.

    The Minister of Petroleum, Diezani Alison-Madueke, said the reforms in the PIB would be passed soon, adding that targets for implementing this legislation have been repeatedly missed.

  • Oil not improving Nigeria’s GDP, says PETAN

    Despite Nigeria’s over 50 years of oil and gas exploration, production and export, the sector has not impacted positively on the Gross Domestic Product (GDP), the President of Petroleum Technology Association of Nigeria (PETAN), Mr Emeka Ene, has said.

    He compared Nigeria with other countries, noting that the impact of oil and gas activities on the GDP has remained flat since 1960, indicating that there is no much difference between condition of living now and what obtained in the 1960s when measured on per capita basis.

    “The impact of oil and gas activities on the GDP, which is a good indicator of economic progress in a country, shows that Nigeria’s GDP growth from 1960 has remained flat when benchmarked against the GDP growths of developing countries such as Brazil, Indonesia and Malaysia, among others.

    “What this means is that the conditions of life and living today are not necessarily better than what they were in 1960 when measured on per capita basis,” he said.

    Ene, who spoke on the need for the National Assembly to pass a balanced Petroleum Industry Bill (PIB), said manufacturing and in-country capacity haven’t progressed much, stressing that this is major challenge to development of the economy.

    He said: “PIB affects us in a direct way and we will like to see a PIB that encourages and continues to encourage investment in every capacity not just today but over the long term.”

    He said the oil industry has a long production cycle, which makes it difficult to get investors easily. “For instance, if you discover an oil field today, you cannot get money from the field until 10 years down the line, if it is a major field. So it takes a lot of guts or a stable economic investment environment to invest in something you cannot get anything from till the next 10 years.

    “This is the challenge the service companies have. Therefore, there is need for Nigeria and, indeed, all oil producing countries to have Petroleum Industry Acts that are stable. For instance, in the last five years, we have had only two projects that have crossed the Final Investment Decision (FID) stage. We expect more of these projects to come on stream because each project is tied to capacity development.”

    He explained that the PIB is beyond what governments and host communities’ take.

     

  • OTC: local firms’ participation increasing, says PETAN

    •Oil reserves declining

    The Petroleum Technology Association of Nigeria (PETAN), a group of Nigerian firms that play in the exploration, production and service segment of the petroleum industry, has said Nigerian firms’ participation in the oil and gas industry is increasing resulting in indigenous in-country capacity development.

    Its President, Emeka Ene, said the increase was demonstrated by the number of Nigerian firms that attended this year’s offshore technology conference (OTC) in Houston, United States to showcase their offerings to attract investments.

    He said 60 members of PETAN signified interest to exhibit at the conference, but due to lack of space, all of them weren’t accommodated.

    “We have 60 PETAN members and due to lack of space, we were not able to accommodate all our members who signified interest in taking part in this year’s conference. We have 50 of our members in attendance. Beyond PETAN members, we have at least another 50 exhibitors. So, in all, there are over 100 Nigerian companies that exhibited in this year’s offshore technology conference.

    “What has happened is that the OTC pavilion has become a very viable platform for exhibitors to showcase what they are doing in the industry, and also to attract investors to the Nigerian oil and gas industry. It is a very good platform for striking new business deal. Apart from that, it has really portrayed Nigeria in a very positive light,” he said.

    Ene stated that the conference created opportunity for people to meet and interact with serious Nigerian players, business men, entrepreneurs and technocrats who have been in business for over two decades, adding that this is why PETAN is taking this extra step to bring Nigerian companies to exhibit and make new business negotiations.

    “We arranged elaborate programme through the OTC week. We had plenary session where the issues concerning the Petroleum Industry Bill (PIB) were discussed, as well as a workshop with Nigerian oil professionals abroad, where issues in the country’s oil and gas were also discussed. These are ways and means to create a platform for Nigerians to interact concerning the issues in the oil and gas sector.

    On the impact of non-passage of the PIB on operations of PETAN and attraction of foreign investments, he said the PIB is like setting the rules of the game. All stakeholders recognise the need to have the rules set straight and the PIB is set to achieve that.

    The PIB, he noted, tries to set a clear structure for operations in the oil and gas industry putting into considerations that there are laws that are decades old, which are no longer applicable in the oil and gas industry. Every stakeholder in the industry recognises the need for the PIB. It is inevitable that the interest of different stakeholders will conflict. There have been some issues concerning investors taking investment decisions on some projects due to the PIB. The reason is some investors want to understand the PIB. PIB look at the industry in long term and PETAN has found itself on the side of the international oil companies (IOCs) and the side of the government.

    PETAN said by holding the PIB workshop, it was easy to bring the stakeholders to the table to discuss on the need to have the PIB, so as to attract long term investment in the industry, he added. He said the oil that we are producing, was not found yesterday, it was found some decades ago. So, the oil that we will be produced in the next 10 years has to be discovered today, or else, oil reserves will continue to deplete.

    “If you look at the net oil reserve in the country, for the first time, it has started to decline. If the oil reserve is on the decline today, so what are we going to produce in the future? The oil reserve is also a tool to negotiate OPEC quota, if the oil reserve is declining, it is going to be extremely difficult to make case for higher OPEC quota, and it will affect oil revenue to the country. It is in our interest to have the PIB passed. What we are saying is that there is need to pass the PIB because it addresses the concerns of short term and long term investors in the oil and gas sector. It is not just about passing the PIB alone, but a PIB that would encourage investment in the oil and gas sector,” he said.

    He explained the need for Nigerians to adopt the Brazilian model of local content. He said Brazil has built its local content in the last five years, but Brazil’s approach to local content issue is different from the way we operate our local content in Nigeria. We look at how much work is available and we say in the next 50 years, we will build like 100 wells, but in Brazil, they calculate all these things and put them into a mathematical formula and come out with the result.

  • ‘IOC’s oil assets divestment good for local players’

    The Nigerian National Petroleum Corporation (NNPC) has said the divestment of petroleum assets by multinational oil companies operating in the country is good for local capacity development as such assets will be taken over by indigenous oil companies.

    The Group Managing Director of NNPC, Andy Yakubu, gave the assurance while fielding questions at an investment forum organised by the Petroleum Technology Association of Nigeria (PETAN) in conjunction with NNPC in the United States.

    Yakubu said the Federal Government would soon start the bidding for some of the abandoned assets by the oil majors once it completes a review of the assets.

    He noted that a lot of the oil assets that have been divested by the oil majors were abandoned and it was only a good thing that they were being taken over by local participants for onward exploitation and production of crude.

    He said: “There is no doubt that Nigeria has a very huge asset base and very robust reserves to production ratio. Nigeria in time to come will continue to remain centralised and strategic. It will continue to dominate the region and stand as a key and prominent player in the global scene.”

    He, however, lamented that indigenous participation has not been high enough, but added that there has been significant improvement over the years.

    “As at last year, we were just about 10 per cent of total production, but because of increased government attention, we are expanding the capacity of upstream participation because within the past couple of years there has been a significant divestment of assets from the majors and those assets were the ones that they (majors) actually did not pay much attention to,” he said.

    The NNPC boss noted that Shell divested about five assets, which were taken up by indigenous operators. “We also have other assets that are being listed for farm-in by indigenous participants because they have not received adequate attention by the IOCs.

    “The Department of Petroleum Resources has itemised quite a number of these assets, which had been neglected by the IOCs, and they are receiving presidential attention. As soon as they are properly compiled, the bid round will commence and the assets will be made available,” he said.

    He pointed out that there have been divestments by other IOCs, including ConocoPhillips, Total and ExxonMobil, adding that those assets were expected to end up in indigenous hands.

    “There is a conscious effort to build the capability and capacity of indigenous operators in the upstream sector of the oil and gas industry. That is the good news,” he added.

    He said Nigeria is very central and strategic in contributing to the energy mix of the world. “As at today, the country has over 36 billion barrels of crude reserve and 187 trillion cubic feet (tcf) of gas reserves and that makes us about the 12th highest reserves in the world.

    “These reserves are spread across mainly in the Niger Delta basin. There is additional potential, which has not been exploited, and we believe when we go into that, it is estimated that we are going to strike almost 600tcf of gas,” he added.

    He said the fiscal regime for the industry as contained in the Petroleum Industry Bill would definitely be in the interest of the country in terms of revenue flow, and it will also encourage investors to come in and play in the hydrocarbon industry in Nigeria.