Saturday, December 9, 2023

Nigeria’s Oil Reserves Will Dry Up In 30 Years, Says Minister of State For Petroleum Resources

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President Buhari who was represented by the Minister of State for Petroleum Resources, Dr Ibe Kachikwu at the 5th triennial delegates conference of the Petroleum & Natural Gas Senior Staff Association of Nigeria (PENGASSAN) in Abuja, asserted that Nigeria’s oil reserve estimate (as per reserve) has been evaluated to dry up in the next 30 years. The President said that the government must pay more attention on gas which would last for 60 years. Adding, that his government must ensure a dramatic movement into gas production. He further chipped in that there was no plan for the sale of the nation’s refineries as rumored by some individuals.The Keynote address on the theme was “Emerging Trends in the oil and gas industry and its impacts on Labour movement in Nigeria,” presented by Dr. Kachukwu. Briefing the audience, He said: “As it concerns Nigeria, we must work inclusively hard to deal with some of the difficulties that we will continue to see in our production platforms. Whether it is the militants which is a key component or the slow speed of approvals or whether the fact that our policies are not even as fast as they should to catch up with changing Times”.He continues that “those of us who have the opportunity to seat in ministerial zones where we have to influence policies have got to work extremely hard to help drive the sea of change that is imperative if the sector is to survive. Infrastructural deficit is a key component. We lack infrastructure in the sector, whether it is down stream or up stream or oil and gas. The absence of infrastructure has made it impossible to have a holistic private sector participation. We have got to find policies that will encourage private sector participants to play a key role. Coupled with that is the fact that countries are moving away from oil. Our oil estimate as per reserve is at best about 25 to 30 years, while gas estimate is over 60 years. Clear enough, Nigeria is more of a gas country than an oil country. But what are we doing to ensure our dramatic movement into the gas production. I am just coming from the FEC where we presented a memo on gas which has been approved today”.He added that “major movement is in terms of what we need to do in the gas environment because it is so key that unless we can put the two energy together, we are not likely to see an improvement in our economy or see opportunities that most of you are beginning to miss in terms of job creation and employment in the oil sector.”
He reiterated that “gas is the new horizon of opportunity. There is so much happening that needs to happen, that should have happened yesterday. Gas is the future for this country and the place to be and we need to start looking at that. Increasingly, we are seeing very strong local players. I need to see gas flaring east out win the next three years. I like to see the refineries which is enmeshed in all kinds of confusion finally kick off. On the issue of refineries, let me say that there has been attempt and there is no approval to concession refineries or sell refineries. I keep hearing discussions all over the place especially from people who should know better. What we have approval for is to bring in a financing mechanism that will enable us to finance and develop and upgrade the refineries as they are. The reality is that once private sector players begin to build their own refineries, whatever we are afraid of will disappear and unless we begin to move very rapidly and quickly to position these refineries in such a way that they can compete, we will lose the refineries completely together with the job scale that exist there right now. My drive is to see that those investments goes through a transparent process and the announcement that you hear about selection has not happened.”
On the emerging trends in the industry, he said the reality is that the oil industry is transforming; while prices have tumbled and have continued to struggle despite all the works done in OPEC to boast it. “The reality is that investments are declining at an alarming rate and suddenly, there are new entrants into the industry. Also, CEOs are struggling as to where to put very scarce resources and suddenly, it is just how well you can market your country, reposition your policies in such a way that there are benefits. All in a sudden, investment return in some of these exploration activities are beginning to get challenges. Only those who are able to look at their technology and new ways of doing business are going to survive the oil industry of tomorrow. If you take the annual return of most of the major oil companies, you will see the sort of disequilibrium that’s happening there and those who are beginning to jump in and out of leadership, he concluded.Photo Credit: Getty

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