Despite Covid-19 challenges, Nigeria’s petroleum industry made progress in 2020

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The Covid-19 pandemic and other economic challenges did not distract the petroleum resources ministry from its reform agenda

The other priority areas he listed are: Increasing Nigeria’s crude oil production capacity to three million barrels per day; reducing the current cost of crude oil production by at least five per cent; aggressive promotion of the passage of the Petroleum Industry Bill ; Promotion of oil and gas exploration activities in the country’s inland basins; Promotion of deep offshore exploration activities and Collaboration with the private sector to aggressively increase domestic refining capacity.

He spoke to the people about his commitment to their best interest, recalling his record during his previous assignment in the ministry under his former boss, Edmund Daukoru. That time, Mr Daukoru had initiated policies that led to the establishment of the Amnesty Programme, which ended violent agitation in the country’s oil-producing areas.

However, for investments to come, he stressed the need for cooperation between the host communities and oil companies. Following the intervention, the dispute was amicably settled and the traditional injunctions that stopped oil production at the OML-25 oil flow station were removed. The resolution of the crisis helped the NPDC to improve oil production significantly and the company’s output has reached a new peak of 331,400 barrels per day as of May 28.The ministry has also made noteworthy progress in the agenda to eradicate cross-border smuggling of petroleum products from Nigeria.

Increased collaboration among government agencies, like the Nigeria Customs Service , National Intelligence Agency , and the Office of the National Security Adviser , has also enhanced supervision, surveillance and monitoring of crude oil exports and petroleum products distribution, particularly the management of retail outlets in the border communities.

Mr Sylva said the policy has ended the fuel subsidy regime. Estimates by the National Bureau of Statistics showed Nigeria spent as much as N1trillion annually to subsidise PMS. “We have stepped back and allowed market forces to determine prices. So, PPPRA cannot announce fuel prices anymore. We only make sure that the marketers are aware of the price range based on the Platts of the time,” Mr Sylva said.The ministry also launched the Nigerian Gas Transportation Network Code to open up opportunities for investors in gas transportation infrastructure as shippers, agents, and suppliers.

The programme, he said, will encourage third-party investors to deploy proven technologies to harness flared gas for the market. The programme is in the bid evaluation phase, with about 45 bidders participating in the process. During the year, the NNPC also established its LPG Unit in the downstream business unit to drive business, apart from its CNG business strategy developed to give the Nigerian consumers alternative fuel for their vehicles.On December 1, the ministry unveiled the National Gas Expansion Programme in Abuja. Mr Sylva said about 18 locations would be opened across the country as gas service stations for the three auto-gas streams – CNG, LNG, and LPG for industrial, transportation and domestic uses.

“We expect everybody will convert their petrol cars to gas. We expect that filling stations would also upgrade their infrastructure to ensure that people can drive into filling stations and fill up the fuel tanks with liquefied petroleum gas, compressed natural gas or liquefied natural gas,” the minister said.The ministry under Mr Sylva has been moving towards the monetisation of gas resources through the Nigeria LNG project.

On completion, the production capacity of the six-train plant would expand by 35 per cent, from 22 million tonnes per annum to 30 MTPA. Nigeria’s average crude oil production in 2019 was about 1.8 million barrels per day, significantly below the 2.3 million barrels per day in the country’s budget for the year.

OPEC quota for Nigeria announced in April was 1.412 million barrels per day for May and June; 1.495 million barrels per day for July to December and 1.579 million barrels per day between January and April 2022. During the year, Mr Sylva said the ministry took steps to improve security in the operating environment; protect pipelines to reduce vandalism and sabotage of oil facilities to improve pipeline availability during the year; optimise current crude oil production; reduce contracting cycle to six months; increase exploration activities and bring to maturity other opportunities.

The NNPC also recorded significant success in the search for oil in the country’s inland sedimentary basins, particularly in the northern part where hydrocarbon deposits were discovered in commercial volumes in the Kolmani River II Well on the Upper Benue Trough, Gongola Basin, Bauchi and Gombe States in the North-Eastern part of the country.

 

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Abi has our own refinery started working

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