Petroleum industry operators have called on President Muhammdu Buhari, to urgently stimulate exploration and production activities in the country in order to place Nigeria on a competitive reserves and production status with its peers in the Organisation of the Petroleum Exporting Countries, OPEC.

They also called for robust consultations with players in the sector to evolve workable polices that will deliver on prime national economic aspirations.

These were the focus at a recent industry dinner and awards night hosted by the Petroleum Technology Association of Nigeria, PETAN, in Lagos, where professional groups were unanimous on the way forward for the oil and gas industry.

Boosting E & P activivities

Chairman of PETAN, Mr. Emeka Ene, noted that the nation’s crude oil reserves might not sustain the realisation of the country’s long term economic targets if urgent measures were not taken to boost exploration activities and build reserves.

Ene, who is also the immediate past Chairman of the Nigerian Council of the Society of Petroleum Engineers, SPE, said the low price cycle in the global oil market and consequent drop in the cost of services in the industry is an opportunity to drive exploration for more oil and gas reserves.

He pointed out that robust oil and gas reserves form the basis for increased production, adding that exploration and drilling is best done during periods of low oil prices.

Ene, who is the Managing Director, Oildata Energy Group, one of Nigeria’s leading energy service companies, urged Nigeria to follow the steps of its peers in the Middle East and North Africa, where drilling rig counts and cost of industry services have sharply risen since the fall in oil prices.

He argued that Nigeria’s long-term economic aspirations are at stake under current industry impasse where exploration investments have fallen, dragging down field activities and compelled redundancy and massive lay-offs across the industry.

Ene maintained that PETAN can provide leadership in the service sector by providing a model for value-added local content in the oil and gas industry, which guarantees significant cost reduction as a stimulus for increase in drilling and production activities.

He therefore urged the government to provide a solid basis for its medium to long term economic aspirations by pursuing the realisation of set agenda. These include increasing Nigeria’s oil reserves to 40 billion barrels and daily production of 4 million barrels per day, bpd, monetise the country’s vast natural gas resources, and increasing local content in the industry activities.

Creating wealth buffers

Also speaking, the Managing Director, Seplat Petroleum Development Company Plc, Mr. Austin Avuru, decried the country’s low reserves status, saying that despite the highly advertised economic contributions of the petroleum industry the sector has become a drag on the country’s gross domestic product, GDP.

Avuru, blamed the direct impact of the oil price drop on the inability of the government to build a strong Sovereign Wealth Fund to cushion sudden price shocks in the crude export market.

He pointed out that despite the current low oil prices, other OPEC countries are driving exploration and production activities with sovereign wealth funds while Nigeria has been plunged into a deep cash crunch due to unavailability of such funds.

Recall that Nigeria’s sovereign wealth fund established by the former President Goodluck Jonathan’s administration was shared out at the twilight of the administration following pressures from the state governments.

Avuru corroborated Ene’s position that Nigeria’s medium to long term economic aspirations have become unrealistic, because according to him, little or no exploration activities means that the nation’s lean oil and gas reserves can no longer provide support for the much hyped economic projections.

He pointed at falling oil production from the traditional onshore and shallow water terrains from 2.4 million bpd to current 1.2 million bpd, adding that production from the deep water, which should have increased the nation’s production only stabilised at 2.4 mbd.

Against this backdrop, he raised an alarm of imminent gas crisis, saying that rising domestic gas demand means that the existing reserves cannot support medium term demand projections.

Domestic gas demand, he said, has jumped from the previous 300 million standard cubic feet per day, scf/d, to the current 1.0 billion scf/d, with projections that demand will balloon to 3.0 Bscf/d by 2017.

According to him, “The projected domestic gas demand is about four times more than what the country’s current estimated gas reserves can supPetroleum industry operators have called on President Muhammdu Buhari, to urgently stimulate exploration and production activities in the country in order