Nigeria’s Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has urged operators in the oil and gas sector to step up their game on investment so as to take over major operations from international oil companies (IOCs).
He made this assertion during the opening ceremony of the 2019 Nigeria Oil and Gas Opportunities Fair (NOGOF) in Yenagoa, Bayelsa State, yesterday.
The 2019 NOGOF conference which featured about 1,500 participants was tagged: ‘Maximising Oil and Gas Industry for Benefit of Nigerian People’.
He said it was important because many were considering divesting and charting new paths.
According to him, changes in the global oil and gas industry are presently challenging the present exploration and investment strategies. This, he said, was because “oil is fast becoming a degenerating asset with alternative sources of energy taking over and attracting new investments”.
He said Nigeria is yet to take advantages of the opportunities in the sector, despite the fact that the world was moving on from fossil fuels.
The minister urged indigenous firms to take over and stop playing safe if they would benefit from the opportunities availed through new trends in the industry.
Kachikwu said the government had reduced the cost of crude production to 23 dollars per barrel from about 32 dollars, adding that some companies in the joint venture with NNPC had already driven the cost down to 15 dollars.
The minister said henceforth, approval for projects in the petroleum industry would be based on the cost of producing oil and gas, noting that efforts are on to further ensure the cost was brought down to below 15 dollars per barrel.
He added that efforts to bring down the cost of production should not be by the government or through policies, but should be driven by the private sector.
He said: “The ministry is going to come up with a benchmark to analyse and compare companies who do business in Nigeria and what cost of production they are running. This is because any unbelievable cost of production basically impacts the revenue stream of the country.
“We need to start finding out how companies awarded recognition are doing, and why are the others not going in that direction. However, excuses of the environment being different or absent infrastructure can no longer hold water, because there are a lot of countries with a peculiar situation as ours that are producing oil at a relatively lower level.
“One of the mandates that I am giving the Department of Petroleum Resources (DPR) is that as we begin to look at new projects, the cost at which we are going to produce is going to become critical to our ability to approve those projects for you.
“This has brought us to another milestone in the industry where the crude oil loading and export can be effectively monitored from my office. So, it is becoming a major front-burner item.”
He said the government had invested tremendously in the oil and gas sector towards building capacity and investing in human development.
According to the minister, the government had also ensured an increase in production activities, and completion of Egina Project and AKK Pipelines among others, and was also working towards ensuring zero gas flare by 2020.