By Clara Nwachukwu & Sebastine Obasi

Houston, Texas — Minister of State for Petroleum Resources, and Group Managing Director, Nigerian National Petroleum Corporation, NNPC, Dr. Ibe Kachikwu, has identified procurement as the weakest link in the Nigerian oil and gas industry value chain.

THE MINISTER OF STATE FOR PETROLEUM RESOURCES, DR EMMANUEL IBE KACHIKWU

Kachikwu said this at the opening of the 2016 edition of the Offshore Technology Conference, OTC, which kicked off Monday, at the Reliant Park in Houston, Texas, United States of America.

Represented by Mr. Saidu Mohammed, Group Executive Director, Gas and Power, NNPC, Kachikwu said there was need for Nigeria to domesticate its oil and gas industry to achieve optimum benefits.

He said: “Under Petroleum Technology Association of Nigeria, PETAN, a lot is going on and it is always towards the programme we have mapped for ourselves. Nigeria has to domesticate what we do in the oil and gas industry, starting with engineering, procurement and construction.

“We have got the first part of it, as substantial part of the engineering today is being done in the country. Substantial part of construction cannot be done elsewhere except in Nigeria. But procurement has been a headache.”

While acknowledging the effects of the dwindling oil price, the minister reiterated the need to look inwards and reduce costs, to stay afloat.

He said: “With the capacity building in Nigerian entrepreneurship going on today, with the sub-letting of so many of the equipment we need in the oil and gas industry, of course, Nigeria is going in the right path. Agreed that so many things are happening in the oil and gas industry, particularly with dwindling oil prices; nevertheless, what does it call for?

“It calls for us to look inwards so as to optimise costs, reduce the cost of production so as to remain afloat. However, we cannot reduce the cost of production if we don’t have Nigerian expertise in the development of procurement materials. That is really why we need to commend PETAN members in that regard.

“You optimise your cost when you are in difficulties. At the end of the day, there is a bottom line. What do you use, what are the inputs in terms of production? You look at the inputs and then apart from the human beings, you need machinery. How can you lower the cost of those inputs – the machinery, the chemicals that you use day and night?

“How do you reduce the cost? You can only reduce the cost when you produce them locally. That is the direction we are going now. That is why we appreciate PETAN and its members. We need to be cohesive. We need to be focussed. We need to be determined to make sure that Nigerian oil and gas industry is completely managed by Nigerians.”