Mohammed Shosanya

Minister of State for Petroleum Resources (Oil),Heineken Lokpobiri,has said that the quickest way for the country to overcome the current economic hardship is through the exploration and production of oil and gas.

The minister,who disclosed this when he visited members of the Petroleum Technology Association of Nigeria (PETAN) in Lagos, expressed federal government’s readiness to collaborate with the Petroleum Technology Association of Nigeria (PETAN) in a bid to increase Nigeria’s oil production and revenue.

He also said that the government is actively engaged in policy evolution, aimed at maximising the utilisation of all available oil and gas wells in the country.

“He said: ’No country leaves their well idle, in Nigeria so many seismic activities have been done and we have a lot of oil wells that are yet to be utilized.

“Imagine, one of the OML’s has about 150 idle wells. There is no way we can increase production if these wells continue to be idle. The wells are already drilled and capped since 1970s. These are low-hanging fruits.

“Part of our policy direction is to see how we can farm out some of these idle wells for proper utilization. Now that the world is transiting to cleaner energy, the country must use the available time to maximise the utilization of the wells to increase production.

‘’Except we increase our production, our midstream and downstream will continue to suffer. So, I believe that I and PETAN need to work together so that we can maximise the opportunities the industry can avail us, for the economic prosperity and development of the nation.’’

He disclosed that he had made a strong commitment to work with PETAN and other Nigerians in the oil and gas sector, who have shown proven capacity to ensure the growth of the sector.

He expressed conviction that the solution to Nigeria’s energy poverty lies with every stakeholder, stressing that nobody or nation will come to salvage the nation’s oil and gas industry except Nigerians.

According to him,if Nigerians are allowed to play at the desirable level, there will be a lot of improvement in the petroleum sector.

He explained that the essence of the local content law was to enable Nigerians to build strong capacity to be able to play side by side with their international counterparts.

He noted that Nigeria has not depleted her oil reserve, saying rather, with the increased reserve that was announced recently by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), it was expedient that the Nigerian government will do all it can to drill more wells.

The NUPRC had announced a rise in Nigeria’s hydrocarbon reserves as of January 1, 2024, with the country’s stock of crude oil jumping by 1.087 billion barrels and its gas reserves surging by as much as 2.573 trillion Cubic Feet (TCF).

In line with NUPRC’s statutory declaration, Nigeria now boasts of 37.5 billion crude oil reserves, while its total gas resources as of the beginning of this year, now stands at 209.26 TCF.

The minister said the President Bola Tinubu-led administration is doing all it could to take the nation to a better economic standing in the comity of the nations.

He affirmed that one of the cardinal points of the president was to address the nation’s energy poverty, noting that as the world is transiting, the nation must address its challenges to enable the country to transit as well.

In his remarks,the Chairman of PETAN, Engr. Wole Ogunsanya, reiterated the association’s commitment to supporting the Minister and all the efforts of President Tinubu toward increasing oil production and development of the energy sector.

He also implored the government to see how it could grant incentives to stakeholders in a bid to ensure better output and economic benefit for the industry and the nation at large.

He said: ‘’Honorable Minister, we thank you and assure you that we will continue to align ourself with the vision of the president. And as we have continually said, the nation must show its indigenous capacity to explore and drill oil 100 percent.”

He affirmed his PETAN members’ ready to help in the development of the Nigerian oil and gas sector.

Also speaking, ,the Publicity Secretary of PETAN , Dr. Innocent Akuvue ,thanked the Minister for making out time to visit the association. He assured the minister of the association’s commitment to support the ministry always.

He said:‘’Honourable Minister ,we thank you for this wonderful visit and we want to assure you that PETAN is solidly behind you and Mr. President. By God’s grace we will not fail to support the vision and aspirations of the president in boosting the economic situation of the country”.

He noted that PETAN is an association of Nigerian indigenous technical oilfield service companies in the upstream and downstream sectors of the oil and gas industry. The association was formed to bring together Nigerian oil and gas entrepreneurs to create a forum for the exchange of ideas with the major operators and policymakers.

Mercy Salawu

The Gas Supply and Purchase Agreement (GSPA) to support the Final Investment Decision (FID) for the Brass Methanol Project is to be executed by May, 2024.

Minister of State Petroleum Resources (Gas), Rt. Hon. Ekperikpe Ekpo announced this on Wednesday after a meeting held with key stakeholders of the project in his NNPC Towers Abuja office.

The meeting was to confirm adequate gas supply to the Brass Methanol Project by the NNPC/Shell/TotalEnergies/NAOC Joint Venture (JV), as well as determine the next steps to conclude and execute the GSPA and mature the phase 2 of gas supply to the project.

Present at the meeting were the Head of Joint Venture (JV), Investment Management, NNPC Upstream Investment Management Services, Mr. Olanrewaju Igandan; Deputy Managing Director, Nigerian Agip Oil Company (NAOC), Mr. Richard Orianzi; Managing Director, Shell Petroleum Development Company Nigeria, Mr. Osagie Okunbor; Managing Director of Brass Fertilizer and Petrochemical Ltd, Mr. Ben Okoye, among others.

Ekpo at the meeting informed the officials of President Bola Tinubu’s strong interest in resolving issues relating to gas supply to the Brass Methanol Project.

He said the President was passionate about the speedy kick off of the project so that it could bring in the much needed FDI with attendant economic benefits to the country.

“Mr. President is very passionate about this project and wants something positive to happen in respect of the Brass Methanol project before the end of May this year,” Ekpo said.

The Brass Methanol Project, located on Brass Island in Bayelsa State, is sponsored by Brass Fertilizer & Petrochemical Company Limited (BFPCL).

The $3.8billion project is made up of a gas processing plant, and methanol production and refining plant, product export facilities, among others.

At the end of the meeting, Ekpo announced he had successfully resolved the GSPA issue as the deal would be sealed by May that the NNPC/SPDC JV partners are now fully committed to uninterrupted gas supply for the development of the project.

Mohammed Shosanya

The Nigerian Content Development and Monitoring Board (NCDMB) on Monday received a cheque of $1 million from Nedogas Development Company Limited (NDCL), being part of the return on investment (ROI) on one of the Board’s strategic investments.

The cheque was presented by the Chairman of the company, Engr. Emeka Ene when he visited the Nigerian Content Tower in Yenagoa Bayelsa State, where he was received by the Executive Secretary, Engr. Felix Omatsola Ogbe and other members of the Board’s management,a statement said.

Nedogas Development Company Limited (NDCL) is a joint venture company between Xenergi Limited and NCDMB Capacity Development Intervention Company.

As part of the project, Nedogas Development Company Limited (NDCL) constructed and commissioned a 300 MMscfd Capacity Kwale Gas Gathering (KGG) and injection facility located in the Umusam Community, near Kwale in Delta State, Niger Delta, Nigeria.

The KGG Facility was designed to handle stranded gas resources in Nigeria’s OML56 oil province by providing the opportunity for independent operators in the area to monetize natural gas from their fields through the gas gathering, compression, injection and metering infrastructure of the KGG for quick market access.

Nedogas is one of the several strategic and successful investments of the NCDMB funded from the Nigerian Content Development Fund (NCDF), in line with the Board’s mandate to build capacity and catalyze local projects in the Nigerian oil and gas industry as enshrined under the Nigeran Oil and Gas Industry Content Development (NOGICD) Act.

Speaking,the NCDMB boss stated that the success story of NEDOGAS at Kwale, Delta State could be replicated in other oil- and gas-producing communities to minimise gas flaring. He declared the Board’s readiness to continue collaborating with the company.

“Their model should be extended to other parts of the country where gas flaring is continuing. They have shown that with the modular system, we can quickly remove flaring from our operations in Nigeria.” He confirmed that NCDMB had continued to receive briefings from its investment partners, adding that “we are still waiting for them to come back with success stories. Some of them are near completion and have not started operations yet.”

Chairman of NEDOGAS, Mr. Emeka Ene conveyed the company’s excitement in returning part of the credit and profit, adding that this “proves that NCDMB’s investment was a success and they are getting back that investment.”

He added that “we look forward to further collaboration with the NCDMB to expand the scope,” adding that “NCDMB is now doing effectively and practically and tangibly what it was set up to, which is to impact the economy by direct interventions. That is the way the economy can grow, improve the gas infrastructure in such a way that is sustainable despite the tight economic conditions.”

The value propositions of the Nedogas project include total eradication of flared gas and conversation of environmental pollutants into products of value and creation of a strategic gas gathering hub and injection node for quick access to market for gas owners to monetize gas.

Other benefits include the provision of alternative gas supply to western flank of the OB3 line to add to the volumes of economic sustainability and increase in Nigeria’s Gross Domestic Product (GDP), among other reasons.

The partnership with NEDOGAS is one of NCDMB’s 15 strategic investments geared towards actualizing the Federal Government’s aspirations in key areas of the oil and gas industry. Most of the projects were targeted at actualizing the Federal Government Decade of Gas programme.

Some of NCDMB’s notable third-party investments include Waltermith’s 5000 barrels per day (bpd) modular refinery in Imo State, Azikel Group12,000 bpd hydro-skimming modular refinery in Gbarain, Bayelsa State and Duport Midstream’s 2,500bpd modular refinery in Edo State.

Other investments include Better Gas Energy for LPG terminal and gas distribution, partnership with Rungas Prime Industries Limited to establish a cooking gas cylinders manufacturing plant in Polaku, Bayelsa State and Alaro City in Lagos and the partnership with Butane Energy to deepen LPG utilization in the North.

Mohammed Shosanya

The Federal Government,has concluded plans to revoke licensing of dormant oil fields in order to support its efforts by to shore up oil revenue and increase production.

Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri,disclosed this at the Second Quarter Dinner of the Petroleum Club, with the theme, “Funding Our Way out of the Crisis: Looking up to the Oil and Gas Sector.” in Lagos on Monday.

Of the over 60 companies that got approvals in the last marginal bid round, only about five have actually started production,he said,adding that he would not hesitate to cancel unused licences.

He said:“I don’t need to know you to renew or sign your licence and I will also not look at your face for me to cancel it. Out of those who benefited from the last marginal bid round, out of about 60, maybe only about three or four or five have started producing. Their licences will expire sometime this year because it is for three years, and renewable for another three years. But the condition is that you have a work plan. if you don’t follow your work plan, I also have the discretion to cancel it.

“If somebody has the marginal oil licence and doesn’t have the capacity to raise funding, you’re just impoverishing him,” he mentioned.

According to him,the government would no longer allow any company or individuals to hold on to licences as souvenirs, threatening to farm them out.

The government has also threatened to revoked all licences given to individuals and companies that have refused to start oil exploration.

He expressed serious concerns that Nigerian has lost about $30bn to low oil production in the past two and half year.

He maintained that his target was to ensure the country ramped up production through investments and grow revenue, stressing that was the mandate given to him by President Bola Tinubu.

He said: “One of the things we want to do to ramp up production is to see that any well that is idle has to be allocated to people. The Petroleum Industry Act gives the opportunity that any well that hasn’t been used in the past few years could be farmed out and be given to people who have proven capacity to do exploration so that we can boost production.

“I am engaging stakeholders, the IOCs, the Nigerian National Petroleum Company Limited to say, ‘Look, if you have a multiplicity of oil wells and you are not using them, we will apply the law’

“One of the reasons why our production is low is because we have too many shut wells, some of them contiguous to our marginal fields or oil wells. But by the time we take those wells in line with the law and give you people, and we give a timeline upon which you must produce, we will be able to increase production.”

“The ‘Big Boys’ are holding on to these licences as souvenirs, they are not doing anything about them. That is why we are farming them out. We will not allow any company to do that. Let’s start to do things differently,” he noted.

The Minister further said that, “the worst thing that will happen to Nigeria is for our refinery to be fully rehabilitated and we will have to import crude from another country. That’s why I’m here to engage you that together, let’s change this story.

“In solving the funding challenges, pull your resources together, go into partnerships, so that you can fund the investments in this sector”.

He spoke further that divestment is not peculiar to Nigeria.

“Everywhere in the world, companies divest for different reasons. But in Nigeria, the ‘Big Boys’ are not running away, they want to divest and go deep offshore. This gives opportunities to Nigerians who have grown capacity to take these assets, maximise the productivity in these assets and increase production locally. And Nigeria will not suffer energy poverty,” he advised.

He described the West’s campaign against fossil fuel as hypocritical, stating, “America is doing 40mbpd and they want Africa to stop oil production. Nobody wants to stop fossil fuel production, but they want Africa to stop it. Don’t worry about this campaign, fossil fuel will not go away.”

He called on members of the club to provide alternative funding for the oil sector as done in the Middle East.

“Saudi Arabia and the United Arab Emirates don’t have the problems that we have because they have money to fund investments in their jurisdiction. The only problem we have as Nigerians is that we still look up to the West to get the funds we need to invest in our own oil and gas sector.

“But if all of you here put your money together instead of going individual ways, we will fund some assets in this sector. I think that will be an alternative solution to our issues.

“The West and the Middle East have money made from oil to expand their investments, but we don’t have that money. So, one of the solutions is to put your investments in the upstream and then scale down to the midstream and downstream. You cannot limit your investments to the upstream alone,” he remarked.

Earlier in his opening speech, the Chairman of The Petroleum Club, Mr Austin Avuru, said the club had invited the minister to speak on the topic, ‘Funding Our Way Out of the Current Crisis: Looking Up to the Oil and Gas Industry.’