The Federal Government has expressed its readiness to further reduce the unit cost of crude oil production in Nigeria with a clarion call on players in the Oil and Gas Industry to find innovative technologies and strategies as being used in other climes.

Oil pipeline

Speaking at the just concluded 2018 edition of the Nigeria Oil and Gas(NOG) Strategic Conference and Exhibition in Abuja, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said Nigeria aspired to reduce unit cost of production of crude oil to $15 dollars.

He stated that there was every need to begin to look at how to sustain and firm up regional adherence, stressing that cost of producing oil in Nigeria continues to be extremely high on a comparative basis and the programmes that will drive the cost of production down must be one driven by business sense.

Dr. Kachikwu disclosed that Nigeria’s upstream rig count increased to about 21 as at the first quarter of 2018, against 17 and below five in 2017 and 2015 respectively.

The Minister noted that in 2017 alone, over 33 new mega projects adding volumes of over 50 million barrels equivalents were sanctioned by the DPR.

Dr. Kachikwu stated that the current figures of crude oil reserves were in excess of 39 billion barrels of oil which would at the current consumption rate last over 50 years.

He equally disclosed that Nigeria’s gas reserves had increased by 7 trillion cubic feet (TCF) to 199TCF, up from 192TCF.

Baru Commits to Growing Gas from 1.5bscf/d to 5bscf/d in 2020

The Nigerian National Petroleum Corporation (NNPC) is set to hit the Capital market to fund its new projects which include the NNPC/NAOC JV Idu-Re-development, South Gas Project, North Gas Project and Central Gas Project.

Group Managing Director of the corporation, Dr. Maikanti Baru, made this disclosure at the just concluded Nigeria Oil and Gas Strategic Conference and Exhibition (2018 NOG) in Abuja.

With the theme: “Driving Nigeria’s Oil and Gas Industry Towards Sustained Economic Development and Growth”, Dr. Baru explained that funds from the Capital market would also be used to develop theNNPC/TEPNG JV’s Ikike Project, NNPC/SPDC JV Southern Swamp and Associated Gas Solution Step 2 Project, among others.

“We intend to sanction the Multibillion US Dollars Bonga South West/Aparo (BSWA) project as soon as we conclude an agreement on the Heads of Terms with SNEPCO on the various pending PSC Arbitration disputes. This will jump start the resolution of all the other PSC Arbitration Disputes,” Dr. Baru informed.

Dr. Baru said the current daily domestic gas demand had attained an unprecedented level of 4,000 million standard cubic feet of gas per day which is still expected to grow exponentially to about 7,500mmscfd in the next five years.

He stated that within next three years, NNPC, in collaboration with its Joint Venture partners, was committed to increasing natural gas availability from 1.5bscf/d to about 5billion standard cubic feet per day in 2020 to generate up to 15GW of electricity as well as stimulate gas-based industrialization.

Dr. Baru posited that the Corporation would continue to progress with its Seven (7) Critical Gas Development Projects (7CGDP) which has also been established to deliver about 3.5bscfd of gas to the domestic market by 2020.

He reiterated that the NNPC had sanctioned the $2.8billion 614Km Ajaokuta-Kaduna-Kano (AKK) pipeline project as a demonstration of its commitment to developing structured gas architecture across the length and breadth of Nigeria as part of NNPC’s priority in the medium to long term.

In the Midstream, Dr. Baru submitted that there were ongoing discussions to revamp the four local refineries by utilising private capital in form of Contractor-Financing model, adding that this represents a shift in NNPC’s investment model, redefining the commercial framework for midstream investment in Nigeria.

“Within the new model, investors would be repaid from incremental production of the refineries on prior agreed terms”, Dr. Baru explained.

Dr. Baru said the NNPC believed that the downstream sector holds the future,saying that the plan to become a net exporter of refined products by year-end 2019 is on course.

Thee GMD maintained that the outlook for 2018 and beyond for the NNPC was to increase crude oil reserves by 1billion barrels year-on-year from the current 37billion barrels to 40billion barrels by 2020 and also increase National oil daily production to 3million barrels per day.

He assured that the Federal Government would continue to emplace policies that would grow production volumes and reduce contract approval time to guarantee efficiency in the petroleum sector.

On his part, the Secretary General of the Organisation of the Petroleum Exporting Countries (OPEC), Dr. Mohammed Sanusi Barkindo, stated that the landmark “Declaration of Cooperation,”by24, now 25 oil producing nations has accelerated the stabilization of the global oil market through voluntary production adjustments of around 1.8 mb/d.

He explained that the 174th Meeting of the OPEC Conference and the 4th OPEC and non-OPEC Ministerial Meeting had reaffirmed the partners’ resolve to act in the interests of producers and consumers, stating that participating countries agreed to a 100 per cent conformity level.