Oil & Gas
By Anthony Isibor.
ADEWALE Tinubu, Group Chief Executive Officer, Oando PLC, has said that the shortage of petroleum products is due to the activities of oil thieves and pipeline vandals and not the lack of indigenous capacity.
Tinubu told the just concluded Nigeria Oil and Gas conference held in Abuja that industry players should galvanize their efforts towards ensuring the security of pipelines from vandals and oil thieves.
According to him, two major challenges faced by the Nigerian oil industry are finance and security, which if achieved will enable the country’s indigenous companies with its requisite capacity and resources to be leaders in the oil and gas industry as the number one in gas reserves in Africa, number three producers of gas and the 6th exporter of LNG in Africa.
He described the decline in production as alarming and the inability of the country to meet its daily OPEC quota and the shortage of the products to the activities of these vandals and oil thieves.
“There has been 43% reduction in our production from March 2022 to May. We lose almost 20% of our daily product production to pipeline vandalism and 20,000 barrels a day. This means some 3 million barrels per average a year is lost to oil theft and pipeline vandalism.
“From these statistics that I read, Nigeria experience 20% reduction in our crude oil exports and from an environmental degradation point of view, are not due to the mistakes of operators, but are caused by theft.
In the area of finance, the oil expert noted that Nigeria and Africa are facing a lot of challenges from the global industry.
“The drive to global zero emission is causing the banks to withdraw from fossil fuel financing. In Africa we have lost so many of the banks that we were used to. Therefore, we as an industry need to figure out a way to do this.
“However, what has certainly complicated the issue is the Covid, which upset the industry for two years, and there after the Ukraine crisis, which has created confusion to the extent that European countries are now switching on their own commitments.
“In Nigeria, the issue we have is that we have a country, which is dependent on the oil industry for its export, and I think our focus should therefore be on ensuring that we are prepared to continue to export enough hydrocarbon to underscore our nuclear economy.
“So the good news is that we are the number one gas reserves in Africa with 193TCF, the number three gas producers in Africa with 49.4BCM, and the 6th largest global LNG exporter. We have to give credit to the GM of NLNG, who drove the signing of the LNG deal last year to ensure that the LNG train 7 was approved.
“What we need to do as indigenous companies is that we need to create a conglomerate of approach to infrastructure development such as coming together to create a gas framework; hubs of gas frame for financial capacity, towards being able to export our own gas. Gas is very expensive; the reality is that gas is the transition fuel.
“One of the ways is to tap into the Nigerian bond market with 40 billion dollars in assets. The bulk of the money is being loaned to Nigerian government as treasure bills. As an industry that generates dollars and imports dollars into the country, we need to be able to make a case for the oil industry to get a substantial amount of money,” he added.
Contributing to the issue, Richard Kennedy, Chairman & Managing Director, Cheveron Nigeria/Mid-Africa Business Unir and also the Chairman of OTS, referred to oil theft in Nigeria as an organized crime.
He revealed that the level of oil theft is costing Nigeria millions of dollars daily in lost revenue, which could have helped its fiscal challenges, as well as emphasized the need not to confuse the agitations of host communities of oil-producing areas with the spate of crude oil theft being carried out in the area.
“The volume of crude that is being stolen is well beyond comprehension. You can see some of the figures in the press, maybe it’s about 100,000 barrels per day at $100 per barrel and that’s $10 million per day that is being stolen. And the NNPC owns 60%, while taxes of 85% are paid so it’s a huge loss for the country.”
“From my experience, the issue with crude oil theft should not be confused with host community issues. It is much bigger than that. It is completely different from host community issues. Quite frankly it is organized crime.” he added.
The four-day conference was convened to allow the players in the Nigerian oil and gas industry to set an agenda for her positioning within the evolving global energy landscape, with a focus on emerging opportunities to transform the energy industry through robust legislation, technology and innovation, in-country capacity development and actualize energy sufficiency targets.
A.I
Tags: Adewale Tinubu Cheveron NNPC Oando Richard Kennedy
