By SEBASTINE OBASI

_Given the technical capacity and huge funding required, there is the need for collaboration between Nigerian independents and the multinationals to sustain operations in the sector, the Managing Director of Seplat Petroleum Development Company, Mr. Austin Avuru, has said. 

Avuru stated this at the just concluded Society of Petroleum Engineers, SPE Annual Conference held in Lagos. According to him, with or without the much awaited Petroleum Industry Bill, PIB, Nigerian independents should collaborate with the multinationals to further develop the nation’s hydrocarbon industry.

“I believe that what you are seeing today in some elements of divestments is just a shake out of shared responsibilities.

When we finally get our acts together as a country, and probably decide either to pass the PIB or shelve it entirely, either way, when we decide that this is the direction we are going as an industry. I believe that what we see will be some real collaboration between five or six Nigerian independents and the IOCs in such a way that there will be shared responsibilities towards moving this industry in this country forward. 

“We will see deep-pocketed investments by the multinationals in the deep water terrain. There will also be some shallow water deep finds and then expansion of the domestic LNG industry, either through a couple of additional LNG trains or possibly, or even though remote, the beginning of another LNG company entirely,” he said.

Avuru argued that in view of the spate of divestments, the multinationals will focus on high profile projects to ensure energy security. “When the shakeout is over, the multi-nationals will engage in high profile ventures that will ensure energy security around the world, while the independents will be left to ensure domestic security.

I believe that by the end of 2018, 50 percent of domestic gas supply to power this economy will come from Nigerian independents.  I believe that the entire refining space including the refineries that we have refused to sell will be with the independents.

“If we are lucky in the next three years that Dangote makes good his threats to build a 400,000 barrels refinery that will open the floodgate, a couple of other refineries will follow, either greenfield or finally somebody has the courage to sell the existing ones. Then we might end up by 2020, with the refining capacity in excess of 700,000 barrels,” he added. 

The Seplat MD also said that apart from TOTAL and Mobil, most of the domestic marketing space will be with the Nigerian independents, and foresaw that about 20 percent of crude oil production (between 400,000 and 600,000) will also be with the Nigerian independents.

According to him, “When the shakeout is over, I foresee that the multinationals will do what they are best at; deep pocket ventures, exporting natural gas to markets around the world, for international energy security. They will also be exporting some 60 or 70 percent of our total production to refineries around the world, while the independents will have to face up to the national duty of ensuring domestic energy security.”