Nigeria Has No Technology for Clean Energy - Chevron

Fri, Jul 21, 2017 | By publisher


Oil & Gas

By Anayo Ezugwu  |  Jul 31, 2017 @ 01:00 GMT  |

DESPITE the threat of United States of America’s clean energy project to crude oil production in Nigeria, Chevron Nigeria Limited has urged the country to focus on production of fossil fuel where it has competitive advantage.

James Okereke, general manager, Downstream Gas, Chevron Nigeria and Middle Africa, said the country should ignore the US’s clean energy project and focus on how to develop the inherent benefits of crude oil production.

In a presentation at the 2017 set of Advanced Writing and Reporting Skills, AWARES, School of Media and Communication, Pan Atlantic University, PAU, Lagos, Okereke said, “Nigeria doesn’t have the technology for clean energy. Our competitive advantage is fossil fuel. Fossil fuel would be around for a while. So we should stop bothering ourselves about the U.S taking over the world with clean energy. There will always be energy mix.”

Okereke said Nigeria should invest in developing its oil and gas, and also diversify into renewable energies. “If Nigeria develops its oil and gas, we wouldn’t need to start worrying about the U.S’ clean energy. Ninety percent of revenues after cost from the joint venture oil production are captured by the government. Sixty seven percent of revenues after cost from product sharing contract, PSC, oil production are captured by the government without carrying any risk on investment,” he said.

He advised that the country should encourage investors by revisiting founding policies while also making new policies and laws. He said good policies form the bedrock for investments.

According to him, to keep oil production stable, new developments are needed to offset natural decline curves of existing ones. “Nigeria has 11 largest oil reserves and nine largest gas reserves in the world. What we need is to improve the country’s competitive position and remove obstacles to developments,” he said.

On the Petroleum Governing Industry Bill, PGIB, Okereke said not all activities in the sector needs the PGIB. According to him, international oil companies, IOCs, operating in Nigeria have reduced their capital expenditures in the sector by 20 percent, adding that in the past 15 years, the country engaged in production without new capital investment. He said the oil and gas sector in the country has mainly been witnessing reselling of investments and facilities.

Okereke lamented the challenges the IOCs are facing in the country. He listed the critical challenges to include delays in contracting process policy of the government, weak implementation of industry laws and regulation, multiple taxations which is up to 14 in the industry and insecurity.

He said one of the major challenges facing several production contracts in the industry is undue delays in getting timely approvals from government within the budget period of a contract where foreign exchange and inflation differentials will not change the original narrative of the budgetary preparedness for a particular job.

Okereke explained that it always amounts to huge loss when a company targets to get an approval for a contract within few weeks only to get it after several months when costing of implementation logistics have all changed either due to forex scarcity or even relevance of the job in question.

Realnews reports that Chevron Nigeria Limited is sponsoring all the participants at the AWARES programme as part of its Corporate Social Responsibility, CSR.

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