Crude oil price hits $65.85 per barrel after OPEC, Non-OPEC meeting

•Energy bank needed to grow sector – Analysts

By Udeme Akpan & Ediri Ejoh

Amidst consistent underperformance since this year, the Federal Government has indicated that it was rebuilding the upstream sector to ramp up crude oil production by 100 percent to 3.0 million barrels per day, up from average 1.5 million since this year.

The government also indicated its commitment to the realisation of 40 billion barrels oil reserves, despite missing the December 2020 date for the targeted reserve.

Speaking at the International Conference and Exhibition of the Nigerian Association of Petroleum Explorationists (NAPE) in Lagos, Chief Executive, Nigeria Upstream Petroleum Regulatory Commission, Engr. Gbenga Komolafe, said the targets were hindered by some problems, including oil theft, insecurity and aging facilities.

He stated: “As the upstream technical and commercial regulator, we are committed to addressing these issues to increase our reserves to 40 billion barrels and raise our production to three (3) million barrels per day.

“As the upstream technical and commercial regulator, we are committed to addressing these issues to increase our reserves to 40 billion barrels and raise our production to three (3) million barrels per day.”

He said the government would work towards increased Public Private Partnership (PPP), involving the security agencies, private operators and other stakeholders to address the challenging issues of crude oil theft, sabotage & pipeline vandalism.

The NUPRC boss also harped on, “Collaborative efforts between operators, communities and the deployment of state-of-the-art technology to monitor pipelines in remote areas is on course. Already, as a commission, we have commenced consultation with relevant stakeholders towards the achievement of these objectives. A more aggressive policy on routine Asset Integrity Management to cub crude leakages and spills caused by aging facilities will be adopted”.

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Speaking on other initiatives, he said, “We have an initiative to reduce the cost of production while also bench marking cost across terrain is ongoing. We are making provisions to incentivize drilling targets at deeper horizons and to also provide Guidelines to ensure seismic acquisition design to image deep plays.

“Attractive incentive is being made to encourage multi-client and speculative data companies to acquire state-of-the-art data in open acreage to facilitate exploration activities.”

Energy bank needed

Meanwhile, operators have called on the Federal Government to establish an energy bank with the aim of providing indigenous companies with funds to develop oil and gas assets.

Speaking on impact of the Petroleum Industry Act, PIA, Senior Partner & Africa Energy Tax Lead, Deloitte Nigeria, Olumide Esan, said indigenous oil and gas investors who are acquiring assets of the International Oil Companies, IOCs, need energy bank that will provide funds at lower interest rates for them to develop their onshore operations.

Speaking also, a retired Geologist and Energy Consultant, Dr. Kenny Ladipo,  stated  that a buffer  should  be in place as a strategy to address the funding challenges facing indigenous oil and gas investors.

He stated that major oil and gas assets and resources will be stranded if urgent provisions through funding and incentives are not made available for indigenous players to develop the country’s vast reserves of oil and gas.

Vanguard News Nigeria

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