Mohammed Shosanya

 The Society of Energy Editors (SEE), has predicted that uncertainty will characterise Nigeria’s oil production in this fourth quarter (Q4) of the year due to ongoing challenges in the oil and gas industry.

The group made the projection in its 2024 Fourth Quarter Outlook for the Nigerian Energy Sector released in Lagos, adding that the country’s oil production had been on a decline, and that the trend would likely continue unless there were significant reforms in the sector.

The Society stated in the Outlook that while investments, and oil and gas exploration and production were at an all-time low, shortcomings on the part of the Nigerian National Petroleum Company Limited (NNPC) and the Ministry of Petroleum Resources would negatively impact the success of projects.

“Investments are at an all-time low and this may remain unchanged in the fourth quarter. Oil and gas exploration and production (E&P) are at an all-time low and may remain that way in Q4. The NNPC Ltd is not able to take decisions on moving projects along and indications are that this will remain so in Q4.

“Similarly, the NNPC Ltd is not able to ensure that the divestment programme of the International Oil Companies (IOCs) doesn’t negatively impact Joint Venture operations, and this may remain so in Q4.

“The Ministry of Petroleum Resources is also unable to move stalled projects along and this may remain so in Q4,” the Outlook projected.

It indicated that Nigeria currently has 14 oil rigs operating, according to the latest data from August 2024, and stated that the number had remained unchanged from the previous period and would likely remain so in Q4. Putting this into perspective, it revealed that the country’s oil rig count averaged 10.75 from 1995 until 2024, with a record high of 23 in February 2020 and a low of 3 in January 2000.

Commenting on domestic refining of crude oil and fuel imports, the Society of Energy Editors maintained that the commencement of petroleum refining at the Dangote Refinery is expected to boost domestic refining capacity and reduce fuel imports.

It added that “indications are that the refinery’s operations may be impacted by the disputes between its management and NNPC Ltd regarding crude oil supply, petroleum products off-take, and pricing.”

“This will have a significant impact on fuel supply stability in Q4,” the Outlook projected.

It also asserted that the revamp and commissioning of the NNPC Ltd-owned refineries might remain a mirage in Q4 and that similarly, there was no indication that the 21 petroleum depots and over five thousand kilometres of petroleum distribution pipelines across the country will be revamped in Q4 2024.

On the African continent, the Society estimated refining capacity at 3.6 million barrels per day (mb/d), maintaining that this reflected domestic demand growth.

It said: “On the African continent, refining capacity is estimated at 3.6 million barrels per day (mb/d), a reflection of domestic demand growth. In West Africa, new refining capacities will largely use local crude oil supplies, augmented by imports. The revamp of existing refineries, construction of new ones, as well as the resolution of financing and technical issues, remain a challenge on the continent.”

Mohammed Shosanya

The Nigerian Content Development and Monitoring Board (NCDMB),has signed a Memorandum of Understanding (MoU) with the Petroleum Commission, Ghana (PCG) towards developing and deepening local content regulations in Ghana’s upstream petroleum sector.

The signing ceremony took place on Wednesday at the sidelines of the 2024 Annual Local Content Conference and Exhibition held at Takoradi, Ghana,a statement said.

The MoU is valid for three years and it is centred on the desire to build synergies through information sharing and transfer of skills of mutual interest and benefits.

According to the statement,under the MoU, NCDMB will offer PCG strategic advice and guidance in the areas of laws, frameworks, knowledge exchange, procedures for baseline study, data collection on capacities that exist in Ghana, design of strategic plan for local content implementation in Ghana and other capacity development initiatives.

It added that the MoU would also foster collaboration, provide opportunity for global experience, and facilitate advancement of knowledge, leading to local content development in the upstream petroleum sector.

Besides,NCDMB will offer technical support in the development of the framework in the formulation of regulations and policies for PCG Local Content laws.

NCDMB was established in 2010 by the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, and is mandated to monitor, guide, develop, and promote local content practice in the Nigerian oil and gas sector and linkage sectors.

On the other hand, the PCG was established by the Petroleum Commission Act, 2011 (Act 821) to regulate and manage the utilization of petroleum resources and coordinate the policies in the upstream petroleum sector under the laws of the Republic of Ghana.

On NCDMB’s side, the MoU was signed by the Executive Secretary, Engr. Felix Omatsola Ogbe, represented by Director of Monitoring and Evaluation, Mr. Abdulmalik Halilu, and the Director Legal Services, Mr. Naboth Onyesoh, Esq, while the Executive Secretary/Chief Executive Officer of Petroleum Commission, Ghana, Mr. Egbert Fabille Jrn and the Acting General Counsel, Nana Akua Agyei signed on behalf of their organisation.

NCDMB had signed a similar agreement with the Technical Secretary of the National Content Monitoring Committee of Senegal (ST-CNSCL) in February 2022.

The ST-CNSCL is the agency responsible for the coordination and supervision of the development and implementation of the local content strategies in the Senegalese oil and gas sector.

Speaking earlier at the conference in Ghana, the Executive Secretary NCDMB urged African oil and gas service companies to collaborate among themselves and leverage their unique capabilities and capabilities.

This approach would grow African local content sustainably and help meet the aspirations of the African Continental Free Trade Area (AfCFTA), he noted.

He expressed delight at the collaborative spirit displayed by African countries, noting that “this event is a testament to our unwavering commitment to fostering strategic partnerships and driving sustainable growth within our sector.”

Commenting on the theme of the conference, which is “Attracting E&P Investments to Boost Local Content: New Pathways,” the Executive Secretary underscored the necessity for innovative approaches and collaborative efforts to unlock Africa’s hydrocarbon resources, estimated at over 125 billion barrels, accounting for about 10% of global reserves.

He reiterated the role of NCDMB as a business enabler, supporting the development of an efficient indigenous supply chain and delivering quality service competitively in the oil and gas industry.

Speaking on NCDMB’s achievements, Engr. Ogbe noted significant progress in local content development, with an increase from less than 5% in 2010 to 54% in 2023, attributing the growth to the robust NOGICD Act, strategic implementation by the Board and collaboration by industry stakeholders.

He further highlighted the importance of economies of scale in attracting new investments and optimizing capacity utilization in the Exploration and Production (E&P) value chain.

He also celebrated the establishment of the African Energy Bank by the African Petroleum Producers Organization (APPO) and the African Export–Import Bank.

The bank is expected to fund major oil and gas projects across the continent, mitigating the reluctance of western financial institutions to support new investments in the sector.