The Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Andrew Yakubu has announced that the prevailing gas infrastructure component of the Gas Master plan is designed to increase domestic gas consumption three fold from 1.7 billion cubic feet per day to 5.4 bcf per day by 2019.
Yakubu made this assertion on Tuesday while delivering the keynote address on the second day of the 2014 Nigeria Oil and Gas Conference and Exhibition in Abuja with the theme: “Nigeria’s Strategy to maintain its position as Africa’s leading producer”.
Reeling out the country’s rich profile in oil and gas, the NNPC GMD stated that the country’s reserves stand at 36 billion barrels of oil and about 182 trillion cubic feet of gas and produced an average of 2.2 million barrels of oil per day in 2013 with a reserve to production ratio of 42 years for oil and 155 years for gas.
“In Africa, only Libya has more oil reserves than Nigeria and despite new discoveries in Sub Saharan Africa, especially in Mozambique, Nigeria still has undiscovered gas potential of about 600 tcf,” Yakubu opined.
The NNPC helmsman maintained that even in recent times with the emerging African oil producers, the discovery of the Ogo field in 2013 with reserves of about 750 million barrels of equivalent shows that the Nigerian Delta remains one of the most prospective areas in the world.
He revealed that about 49% of Nigeria’s licensed blocks (397) are still open and active stressing that the availability of production allowances would also provide a welcome boost for small fields and profitability would increase in the proposed petroleum industry bill currently before the National Assembly.
“Nigeria’s quest to grow its reserves is promoted in the PIB through a robust acreage management system to be superintended by the Upstream Petroleum Inspectorate, involving the release of acreages that have been held without activity,” Yakubu submitted.
He informed that in the new exploration paradigm shift, reserves and production decline from existing fields are driving the leading oil and gas companies to formulate new strategies and partnerships adding that the likes of Afren have recently discovered large quantities of resources in the West Offshore Lagos (Ogo Fields).
Yakubu observed that global rationalization of asset portfolio by international Oil Companies, IOCs has led to divestment of some Nigerian onshore blocks adding that this has in turn created opportunities for new companies to partner with indigenous companies.
“For example, the Shell divested blocks, which were initially being funded from joint venture cash call is now being funded by new investors. This has freed the Government from the burden of annual cash call funding. In the case of Nigerian Petroleum Development Company, NPDC, the onus is now on NPDC to arrange funding for the acquired equity,” the NNPC GMD pointed out.
The NNPC GMD emphasized that all the strategies to keep Nigeria as a leading producer of oil are hinged on the passage of the PIB which will remove the uncertainty surrounding the future fiscal framework in the oil and gas sector.
“The passage of the PIB will promote transparency, accountability and good governance and level playing field for players in the Nigerian oil industry. This will doubtless attract the much needed investment in the Nigerian Petroleum Sector,” Yakubu said.
According to the GMD, despite the above strategies to remain a leading player, Nigeria has faced unprecedented challenges with regards to losses in production occasioned by incessant vandalism of crude oil export pipelines and domestic crude oil and petroleum product pipelines.
Yakubu stated that in 2013, Nigeria suffered severe attacks on its critical export pipeline system leading to the loss and deferment of about 300,000 barrels per day.
The GMD stated that to tackle these challenges and ensure that the country maintains its leading position in oil production in Africa, a number of initiatives have been initiated. These include: measures to address pipeline vandalism, improving small field economics, new acreage management systems, new exploration paradigm shift, attracting new capital investment and the introduction of new licensing rounds
