By Diezani Allison-Madueke (Mrs.)
Ministry of Petroleum Resources, Nigeria
Text of the 2013 Ministerial Mid-Term Press Briefing On “Moving the Oil and Gas Sector to the Next Level” on June 18, 2013
The Ministry of Petroleum Resources has in the last two years vigorously pursued the Transformation Agenda of President Jonathan’s administration. Oil and gas which is the mainstay of government revenues and expenditure in Nigeria is critical to supporting various policies and programs of government. The Ministry of Petroleum Resources through its parastatals gives effect to government’s aspirations in the oil and gas industry and has a direct link with the ability of the government to deliver on transformation agenda through:
a) Building sustainable industries with indigenous participation
b) Delivering quality products to the Nigerian people and
c) Creating oil and gas institutions of the future
Our key accomplishments in the period 2010 – 2013 cover the entire oil and gas value chain namely;
Upstream – where we have increased exploration in frontier areas and sustained production in spite of incessant crude theft and pipeline vandalism.
Midstream (Gas) – where we have increased gas supply to power, enhanced gas commercialisation, implemented the gas infrastructure plan and gas for industrialisation.
Midstream (Oil) – where we are repairing and upgrading facilities in our refineries and pipelines distribution network in order to sustain in-country product supply.
Downstream – where we have ensured stable supply of petroleum products in spite of pipeline vandals and product theft, effective and efficient administration of the subsidy program which remains unsustainably expensive and increased domestic refining.
Additionally, improvements in local capacity and indigenous participation in infrastructure investments have been vigorously pursued. The outcome has been in upgraded training facilities and increased regulatory compliance with local content requirements. Details of the highlights across primary accomplishments include the following:
Strategic Objective – Grow Reserves and Production
Increased Exploration Activity:
The Ministry of Petroleum Resources in line with Government drive in achieving the national aspiration of 40 billion barrels of oil reserves and 4 million barrels of oil per day production, including condensate, as captured in vision 20:20:20, has increased exploration activities in the Offshore, Onshore and Inland Basins.
In order to meet the above national aspiration, the following drilling activities were carried out in 2012:
• A total of 19 exploration wells were drilled comprising of 8 exploration wells in the JV and 11 wells (3 Exploration and 8 Appraisal wells) under the PSC.
• 93 Development wells were drilled comprising of 55 development wells under JV while the PSC delivered 38 development wells.
• Within the same year, 33 Workover wells were also drilled consisting of 32 workover wells under JV and 1 workover well in PSC.
Nigeria has nine (9) basins of which the most prospective is the Niger Delta. Others such as Anambra and Chad basins are also known to be rich in hydrocarbon. Presently, exploration has been stepped-up in the entire Inland Basins of Chad, Anambra, Benue, and Bida/Sokoto/Dahomey.
This increased exploration activity is reflected in the following:
. Acquisition of a total of 6,102 Sq.km of seismic data including 818 Sq.Km acquired for FES operations in the Chad Basin in Phases 3, 4 and 5 combined.
. Acquisition of 266 Sq.Km of seismic data in the Phase 6 is ongoing by IDSL (a subsidiary of NNPC) in the Chad Basin even at the height of the security challenges.
. We have also grown IDSL Land Acquisition capacity by additional three (3) 100% wholly owned seismic party crews.
Seismic Data Processing
A total of 24,680 Sq.Km of seismic data was processed / reprocessed in readiness for seismic interpretation. In addition IDSL Data Processing Centre (DPC) has been upgraded to the largest Seismic Data Processing Centre in the West African Sub-region with a processing capability of 20,000Sq.Km. from 2,000Sq.Km.
In 2012, a total of 600Million barrels of reserves were added representing 70% reserves replacement.
As at end of year 2012, the crude oil reserve base stood at 36.8billion barrels; representing 0.06% decrease as compared to year end 2011 figures.
Gas reserves at end of year 2012 was 182Tcf representing a 0.01% drop as compared to year end 2011 figures.
In line with government’s strategy of growing NPDC’s (NNPC’s Exploration and Production Affiliate) through asset transfer, subsidiary) production NPDC’s reserve base has grown to 1.7 Billion Barrels through strategic divestment initiatives.
Sustained Crude Oil Production:
Crude Oil production (including condensate) has been consistently maintained above an average of 2.30 Million Barrels per Day (MBOPD) despite illegal oil bunkering, crude oil theft and pipeline vandalism. Following the Federal Government’s amnesty program, Nigeria’s production rose from an average of 1.9 mmbopd in 2009 to a peak of 2.62 mmbopd in October 2010.
Sustaining production at these levels continues to be challenged by increasing pipeline vandalism and crude theft, which intermittently results in production falling below the programmed 2.46 mmbopd and rebounding following government intervention to stem this menace. The government is tackling this problem through enforcement and the Crude Oil Fingerprinting Initiative.
The period under review also witnessed some significant upstream activities which helped the improvement of overall industry performance:
• Usan FPSO, the new deep offshore PSC field which is currently producing at about 103,000 bpd;
• The next major project in Nigeria’s deep water is Egina project which has been awarded and is expected to cost about $15 Billion and add 180,000 barrels per day.
• Over the period under review, SPDC, Total and Agip provided an opportunity for participation by Nigerian upstream players with the divestment of eight (8) blocks namely OMLs 4, 26, 30, 34, 38, 40, 41 and 42;
• NNPC/MPN JV completed Itut/Abang Satellite Field Development Project (SFDP) with Abang and Itut platform fabricated by Nigerdock in Nigeria.
• After extensive negotiations, expired leases such as the Oil Mining Lease (OML) 67, 68 and 70 of the NNPC/MPN JV were renewed.
• Active participation of indigenous companies has resulted in the new projects coming on-stream like the Ebok Terminal which was established by an indigenous company with current daily crude oil production of 7,000 b/d and a plateau production of 50,000 b/d at full capacity;
As part of improving accountability with regards to Nigeria’s oil production, the Ministry of Petroleum Resources has concluded a pilot scheme for real time crude oil production monitoring. The programme which is referred to as National Production Monitoring System (NPMS) is a remote monitoring system emplaced not only to monitor real time production, primarily, but also other field parameters needed for effective reservoir management and administration.
The government is also committed to recapitalizing the National Oil Company through the asset transfer program by which government’s equity interest in assets divested by the IOC’s are transferred to NPDC.
The assignment of Federal Government interest to NPDC has served two purposes namely; Reduced the cash-call requirement for annual appropriation in respect of these assets since NPDC is a self-funding subsidiary of NNPC and secondly, the transfer of such assets are not free but on the basis of a consideration to be paid by NNPC to the federation.
Beyond this, the strategic implication is that going forward, NNPC’s upstream business will be well endowed with quality assets to be a viable, vertically integrated national oil company. These asset assignments will make NPDC a medium sized independent E & P company, with future potential production in excess of 300 kbopd.
NPDC currently supplies approximately 425MMscfd of natural gas into the domestic market to fulfill its Domestic Gas obligations to the Federation. The company plans to provide additional 100MMSscfd of gas from Oredo by year end 2013 using POOC spare capacity. NPDC is now the largest gas supplier to the domestic market
Upstream Gas Supply for the Domestic Market
Government has also targeted increased domestic supply of gas to all sectors of the economy.
Historically, about 25% of gas was flared, 27% used in the upstream for pressure maintenance, 40% exported and less than 10% was utilised for power and other industry users.
Our total average gas production increased from 7.7Bscfd to 8.24Bscfd representing 7% increase compared to 2011 levels.
Upstream gas supply for power generation, industrial and household use has increased significantly during the period under review following government’s prioritisation of gas supply to the domestic market. Specifically there was an increase in domestic gas supply to support the power sector with over 250MMscfd of gas as part of the emergency gas supply programme.
In addition, gas supply development is being advanced with domestic supply at an all-time peak of 1500mmcf/d currently, most of which is dedicated to the power sector. There is sufficient gas currently and projected by year end to support over 5GW of generating capacity, with a view to increasing to almost 10GW by 2015 / 2016.
• Grew NPDC into a major gas supplier to the domestic market with over 450MMscfd through Oredo and Utorogu gas plants.
Plan is to supply a further 100MMscfd by year end through NNPC/Pan Ocean JV’s Ovade gas plant.
Phase II of Oredo gas plant when completed in Q2 2014 will also supply 5MTPA of LPG to neighbouring states as part of our Green Revolution.
As a result of this prioritisation, gas flaring as a percentage of gas produced has reduced progressively from about 28% in 2009 to 15% in 2012.
Aspiration and Strategy: Link Gas to the Wider Economy
Recognizing the potential for tremendous economic growth inherent in the nation’s vast natural gas resources, His Excellency, President Goodluck Jonathan, outlined a 3 point mandate for natural gas comprising
1. Boost in gas supply to the Power sector
2. Stimulation of gas based industrialization around Fertilizer, Petrochemicals, Methanol etc., effectively leveraging gas as feedstock for key industries, thus creating jobs and
3. Selective investment in high value regional pipeline and LNG export opportunities to boost revenues from gas sales
The Ministry of Petroleum Resources has been pursuing this mandate aggressively.
To deliver on the ambitious mandate, targeted interventions were pursued by the Ministry to rapidly transform the relatively young Nigerian domestic gas sector in a short time.
The interventions are all aimed at creating a sustainable growth in the gas sector and include:
a) Gas Supply Emergency Initiative
b) Aggressive implementation of gas infrastructure expansion
c) Gas Revolution/Industrialization initiative and
d) Commercial framework for domestic gas
The Gas Supply Emergency Initiative
The gas supply emergency initiatives fast-tracked gas additions. Some of the key achievements include;
• Major upgrade and repair works at the Utorogu/Ughelli gas plants resulting in addition of over 100mmcf/d,
• Oredo gas plant was completed, commissioned and added 100mmcf/d of gas,
• Upgrade works at Escravos also resulted in additional 190mmcf/d.
• The Emergency Initiative is still ongoing and additional 150mmcf/d is expected by the end of the year.
• Evidently, gas supply growth is intended to continue steadily over the coming months and years, boosting power supply to Nigerians.
• Whilst some gap between Power sector demand and gas supply may re-occur in the medium term as new power plants get commissioned, the gap will continually be bridged over the next 18 months.
As a result of the interventions, domestic gas supply has grown to its highest level ever at 1500mmcf/d from 900mmcf/d in 2010. The growth is expected to continue to 1630mmcf/d by the end of 2013. Within this growth, gas to power grew by 72% from 620mmcf/d in 2010 to 1065mmcf/d currently. By the end of the year, gas to Power would have risen to 1195mmcf/d, almost two fold increase from 2010.
Despite the significant progress in supply growth to power, we suffered setbacks lately which have impacted negatively on gas supply to power. 3 significant events resulted in loss of 1300MW. The events include the vandalization of the ELPS A gas pipeline at Gbaramatu on the 22nd of June, the vandalization of the Trans Niger Pipeline in the East on 16th July, which resulted in the eventual shut down of gas supply to Afam power plants and finally, reservoir challenges in the Oben gas plant, resulting in restriction of supply to Sapele power plant. These events resulted in outage of 400MW, 750MW and 150MW respectively. NGC has commenced repairs on the blown pipeline and expect to complete this by the end of September. Shell just announced yesterday, that it has completed repairs of the Trans-Niger pipeline. Consequently, the Afam power plants are expected to resume operation within 48 – 72hrs restoring about 750MW of lost power. SEPLAT, the operator of the Oben gas plant is working on repairs of the plant and expect to reopen within 3-4 weeks.
It is important to also note that in the period under review, gas to non-power sector almost doubled from 185mmcf/d to 357mmcf/d, providing feedstock that has supported the recent aggressive growth in the nation’s cement sector as well as other manufacturing companies. To date over 200 manufacturing industries now run on natural gas and the number continues to grow daily as NGC builds more pipeline infrastructure.
Underpinning the supply growth were successful efforts in infrastructure expansion, more acceptable commercial environment and the Gas Supply Emergency. Specifically on infrastructure, over 300km of new gas pipelines were completed and commissioned. These include the 190km Oben-Geregu line, the 120km Escravos-Oben line, the 25km Itoki-Olorunshogo line and the Imo River-Alaoji pipeline. In addition, 340km pipeline segment from Oben-Lagos is ongoing and due to complete within 6 months. This infrastructure expansion is the most aggressive in 40years. By the end of 2013, the nation’s gas backbone, the Escravos-Lagos pipeline, would have doubled its capacity to 2.2 billion cubic feet per day, creating one of the largest capacity gas pipelines in Africa and creating a major supply artery for a majority of the nation’s power plants. Specifically, as a result of the infrastructure expansion, all completed Power Plants such as Geregu, Olorunshogo, Omotosho, Ihovbor and Alaoji now have permanent and adequate gas supply pipeline connection.
In addition to above, the contract for the vital 120km East-West gas pipeline crossing the River Niger, was awarded and is progressing with a target completion time of 2015. Engineering work is almost complete and the contractors have mobilized significant construction equipment to site ahead of commencement of construction works by October. This pipeline creates a major linkage between the huge gas reserves in the Eastern Niger Delta and other parts of the country. When completed, evolving shortfalls in gas supply to Power in the Western area will be adequately and permanently mitigated with excess flows from the East via this critical pipeline.
A final element of the infrastructure expansion is the Calabar-Ajaokuta-Abuja-Kano pipeline. This is now the focus of attention. Major engineering review of the 1000km pipeline has now been concluded and plans under way to jumpstart this pipeline by the end of the year/early 2014, opening up gas access to the East and Northern part of Nigeria. Over $600m is expected to be deployed from Eurobonds being issued by the Ministry of Finance to jumpstart this pipeline by year end. By end 2015, gas access to Abuja should have been established and Kaduna/Kano thereafter, opening up the Northern half of the nation for industrial revitalization.
The Ministry also achieved major milestones in its reform effort in the commercial framework for domestic gas, this being a critical necessity to sustain multi-billion dollar investment in supply growth. In the period, gas prices have been reviewed to more commercially viable levels in the domestic market, with a view to achieving export parity pricing by the end of 2014. From gas prices which was as low as $0.1/mmbtu a few years ago, a price level that cannot cover the cost of production, we have reviewed pricing and actually implemented the review. Gas price has increased to $1.50/mmbtu in 2013 and will increase further to $2.0/mmbtu by the end of 2014, creating price levels that can sustain investment in development. This has been a major milestone, addressing a 30 year old challenge of sub-optimal gas pricing which prevented sustained gas supply development.
Mr. President launched the Gas Revolution initiative in 2011 with a view to jump starting a second era of industrialization in Nigeria after many years of lull. After a few teething challenges, this initiative is now on course. 2700 Hectares of land has now been secured at Ogidigben in Delta state for the Gas Industrial City, which will be the largest gas based industrial park in Africa. It will house Africa’s largest Petrochemical, Fertilizer and gas processing plants, creating over 100,000 jobs during the construction phase and many millions more post commencement of operation by 2017/18.
Limited work has recently begun onsite, with early crew working on soil testing, geotechnical surveys and other preliminary civil related surveys. Full site clearing will start in a few weeks as well as construction of Dock etc. before the end of this year. Full blown construction activity for the fertilizer, power and gas processing plants is expected towards latter half of 2014
NNPC also continues to champion key gas penetration initiatives. Through the Joint Venture with NIPCO, Compressed Natural Gas for vehicular use has grown with the pilot initiative in Benin City. Over 2000 cars now run on natural gas in Benin and many more get converted daily. There are 6 gas filling stations in the city and the most dominant users are commercial taxi drivers. The impact on their daily economics has been significant and the expansion in subscription of new conversions has been by word of mouth to fellow taxi drivers. It is intended to now expand this initiative across the country, reducing the cost of transportation whilst at the same time enhancing the quality of the environment.
Strategic Objective: Sustaining In-country Product Supply
Increased Domestic Refining by NNPC
Nigeria’s product supply and distribution system consists of about 5,000km of pipeline network interconnected to the four refineries with a total capacity of 445kbd at three locations namely Warri, Port-Harcourt and Kaduna. The reliability of this network holds the key to sustainable supply of petroleum products across the country.
Nigeria’s petroleum product consumption for white products is estimated at about 38 Million Liters PMS , 12 Million Liters AGO and 8 Million liters DPK, whose production is inadequate for meeting domestic consumption even if they operate at design level.
This situation has led to importation of products from proceeds of crude exports to supplement supply from domestic refineries.
The plan going forward is to rehabilitate the refineries so as to obtain maximum production from them. This will meet about 70% of the country’s needs. The deficit will be met by on-going plans to construct Greenfield Refineries. The Ministry is also cooperating with private initiatives for construction of new refineries.
We have progressed with plans for rehabilitation of the refineries commencing with the Port Harcourt refinery. Long lead items have been procured and 7 shipments have arrived in the warehouse. Early works have commenced.
KRPC and WRPC Rehab will follow in Q4 13 and Q1/2 14. Heads of Agreement have been signed for these and surveys are ongoing
Pending completion of the rehabilitation projects, the various interventions carried out in the refineries have already resulted in improvements in performance as follows:
• Average annual capacity utilisation has increased from 21% in 2010 to 31% in 2013.
• It is significant to state that but for the incessant vandalisation of the crude supply and product evacuation pipelines, average capacity utilisation would have been much higher.
• The FCC units in all three Refineries are now working.
• Contribution to in-country product supply from the refineries has grown from about 4million litres/day of PMS in 2010 to about 10million litres/day as at Q1 2013. This has reduced expenditure on fuel importation. Sustainability at this and higher levels will be after the Rehab projects are completed.
Other benefits of the turn-around and refineries revamping include: Improved on-stream availability; Improved unit throughput/ capacity utilization; Improved finished product yield; Improved financial performance; jobs will be sustained/created; enormous multiplier effect on the economy and Security of products supply.
Government is also implementing capacity building in the downstream sector that will make Nigeria a regional hub in refining operations.
Midstream Oil (PPMC)
Interventions in the refineries have been accompanied by upgrade in PPMC facilities arcos the nation. After many years of being inoperable due to pipeline vandals, the Port Harcourt – Aba product line has been rehabilitated and the Aba product Depot was re-commissioned after seven (7) years of inactivity. This has enabled products to be sent directly from the Port Harcourt refinery to Aba for onward distribution in the Eastern parts of the country. Aba – Enugu product pipeline is expected to be recovered by third quarter, 2013.
Similarly, Warri – Benin product line has been recovered and the Benin depot has been re-commissioned. Other lines recovered so far include:
• Kaduna – Suleja
• Kaduna – Gusau
• Suleja – Minna
• Kaduna – Jos and
• Jos – Gombe
All these depots are now fully operational.
Meanwhile, we are aggressively working on the recovery of the remaining product pipelines and depots namely; Enugu – Markurdi; Gombe – Maidugri and Markurdi – Yola.
Restoration work in the refineries and pipeline distribution network / storage systems have contributed to stable supply of petroleum products across the country despite the challenges of vandals and the criminal activities along these vital and critical infrastructure.
In combating these threats, NNPC is currently executing a new initiative of horizontal directional drilling (HDD) in vandalism hotspots.
Oil Trading Activities
NNPC has also enhanced its direct participation in the international trading of crude oil through an active involvement of its subsidiary, Duke Oil. The Company’s trading activities have grown significantly over the last 3 years.
Duke oil has increased its traded volumes to 64,000barrels/day from about 31,000 barrels/day in 2010. Revenues have grown to 2.66 Billion USD in the last financial year from 921 Million USD in 2010 representing a 290% increase.
NNPC’s increased retail footprint
Within the past 3 years, NNPC has taken steps to expand its role in the delivery of petroleum products to the public through the NNPC Retail’s network of stations, with a view to becoming a dominant player in product retailing, as is the case with other National Oil Companies. As a result, NNPC Retail has become a more prominent player in the Retailing segment of the Oil industry and is gradually becoming the bedrock for product supply stability and the benchmark for petroleum product quality, and pricing across the country.
The number of NNPC Retail outlets has increased to 505 in Q1 2013 from 465 in 2010; a growth of about 9%. In the same vein the Company’s Market Share in total white products has grown to 13.3% over the same period. The Company has already become the market leader and the choice brand in the downstream petroleum retailing business in the country.
As the company continues to affiliate more strategically located and large volume stations, new Mega and Standard stations are also being built.
The supply of petroleum products at controlled prices to riverine communities in the Niger Delta has been significantly enhanced with an increase in the number of operational Floating Mega Stations from 6 to 9 over the same period. Additional 2 floating stations will commence operations by August 2013.
NNPC Retail has engaged the services of more than 400 Trucking companies with a total of about 3,500 trucks, as well as owners of several sea-going barges, to transport products from various product loading depots to its stations, thereby providing strong practical support Government’s employment creation drive and economic transformation. Through its operations, the Company has created employment for hundreds of thousands of Nigerians while generating and supporting massive economic activity in the Country.
NNPC Retail will also commence the sale of LPG into the domestic market before the end of 2013 as part of Government’s effort to ensure that the public secures easy access to cooking gas at affordable prices and reduces dependence on kerosene and firewood. In the first phase of this activity, the Company will inject about 100,000 branded cylinders into the market within the next 3 months in a massive drive to ensure that large numbers of families could obtain and use LPG in their homes before the end of the year. This strategy will assist in reducing the amount of kerosene consumed in the domestic economy by 200 Million litres.
The Company will also venture into the lubricants market by Q1 2013 in order to expand the customer’s choice and access to these products at competitive prices.
Plans are at an advanced stage for NNPC to enter into marine fuel bunkering business by Q4 2013. In this regard a joint venture is being negotiated with a reputable technical operator. The new company will help to streamline and standardise the business of marine bunkering in the country and transform the sector into a profitable and reputable industry that will create jobs and transfer know-how to Nigerians.
Strategic Objective: Stable Supply of Petroleum Products
Stable Supply of Petroleum Products
The period under review witnessed stable supply of Petroleum products through strategic and proactive government support of the downstream sector. Government, effective January 1 2012, increased pump prices for PMS in order to reduce the unsustainable subsidy bill. As a result, there has been:
• Marked reduction in consumption from over 60 million litres per day in 2011 to about 40 million litres per day in 2012. This reduction in the daily consumption and increased in PMS prices has reduced the payment of fuel subsidy from over =N= 2 trillion for 2011 to a little above =N= 1 trillion in 2012.
• The reduction can also be attributable to better monitoring of vessel arrivals, discharges and truck-out of PMS from the depots by the nominated Surveyors as an added check on Marketers PSF operations, in line with global best practices;
• Restricted participation of Marketers under the PSF Scheme to owners of coastal discharge/depot facilities (number reduced from 128 to 38 presently).
• Introduction and enforcement of the submission of the following additional documents as a pre-condition for processing of subsidy claims under the PSF Scheme: Certificate of Origin, Affirmation Letter from Supplier, and Complete “Family tree” of transaction.
• Restrictions on Third Party discharges, to ensure even and fair distribution of products across the country, while also ensuring that products are effectively monitored and sharp practices associated with discharges are curbed.
• Implementation of Trucking Policy for remote sensing technology for tracking road trucks hauling petroleum products to their various destinations. This has prevented product hoarding, product diversion and product adulteration in the country.
• Integrity of nationwide product distribution gradually being restored.
• Minimal or no disruption in fuel availability in the country in the last six months due partly to the impact of Project Aquila.
• Project Aquila electronic monitoring of petroleum products distribution has resulted in an increase in Product availability in depots and outlets from 40% in 2010 to almost 95% in 2013 thus eliminating diversion with the concomitant effect on the economy of such locations.
• Project Aquila payment efficiency has encouraged increased investments in the downstream sector resulting in new depots from 44 locations in 2010 to 71 depots in 2013, a 62% increase and ₦53B investments from 27 new depots, 1,000 new retail outlets and 800 new trucks. Pressure on the money markets has also eased since marketers now receive their claims timely and no longer take loans to run their business thus contributing to the money market stability.
• Revamping of Atlas Cove Depot Facility incorporating the reconstruction of PMS Tank 11 and 12 and some critical pipelines in the products distribution network.
INCREASED NIGERIAN CONTENT AND SUSTAINABLE LOCAL CAPACITY
Indigenous/Local Investment in Critical Infrastructure
There have been unprecedented local investments in infrastructure in the industry viz:
• Marine vessels of various categories wholly owned by Nigerians increased from 54 in 2011 to 180 by the end of 2012. These vessels are category 1 type, while vessel categorization scheme of the NCDMB made more Nigerian owned category 2 vessels and increased the number of Nigerian owned vessels to 208 in Q1 2013;
• Investments in reception, storage and distribution facilities, for instance jetties, depots, trucks, vessels and modern retail outlets, an effort that has led to above 18 days PMS sufficiency;
• Increased asset in land, swamp and offshore rigs which is a key performance indicator in business growth in Nigeria service companies. Nigeria companies are forming partnerships for deep-water rig ownership and have put in place strategy that will increase rig ownership from the current 26 to 31 by 2013.
Indigenous investment in critical oil and gas infrastructure is creating employment for 30,000 for Nigerians, creating wealth and increasing our technical know-how for technology transfer.
i. Infrastructure Usage, Development and Upgrade
• Usage and Sourcing of Nigeria made pipes in the Nigeria Petroleum industry;
• Upgrade of fabrication yard which has led to new capabilities in the industry. Nigerdock fabricated and completed the Abang and Itut oil production platforms using 100% Nigerian engineering and fabrication. Total investment in facilities upgrade is estimated at above $2billion and has generated over 10,000 jobs;
• Stimulated local manufacture of equipment and components by requiring Original Equipment Manufacturers (OEMs) and Vendors to identify components to be manufactured in Nigeria before certification.
ii. Skilled Manpower in Oil and Gas Industry
• With passage of the Nigerian Content Law in 2010 and enforcement of its provisions on Expatriate Quota management by NCDMB, in collaboration with Ministry, there has been significant growth in Nigerianised positions among the operating companies.
iii. Training Facilities
• Upgrade projects by PTDF include the establishment of National Centre for Skills Development & Training in Port-Harcourt, upgrade of the Petroleum Training Institute, Effurun, Delta State; the establishment of the Federal Polytechnics of Oil and Gas in Ekowe and Bonny; the establishment of the National Institute of Petroleum Policy and Strategy (NIPPS) in Kaduna, many University upgrade programmes and the development of ICT centres in institutions and schools;
HYDROCARBON POLLUTION RESTORATION PROJECT (HYPREP)
Hydrocarbon Pollution Restoration Project (HYPREP) was established on the 20th of July, 2012 to investigate and evaluate all hydrocarbon- polluted communities and sites in Nigeria.
HYPREP has launched a platform that is directing concerted efforts not only to restore the environment but also to improve the social economic opportunities and well-being for hydrocarbon polluted communities in Nigeria. HYPREP has embraced the Community Driven Development (CDD) approach in tackling livelihood challenges in affected communities. The thrust of this initiative is to develop projects that have wide input and are replicable in the development of the Community with its attendant multiplier effect.
To complement the ongoing efforts of HYPREP, the Ministry has undertaken documentation of oil spill sites in 9 States of the Niger Delta Region of the Country. The Project entails the identification of oil spill sites and the assessment of the impact of oil spillages on the eco system of the region. The outcome is the remedial steps for the amelioration of the degradation of the environment.
In addition, various activities have been instituted to rehabilitate and restore the devastation caused by extensive exploration activities in the Niger Delta. These include:
i. Monitoring adequate signage informing of dangers of hydrocarbon polluted water.
ii. Drinking water tanks have been provided to be distributed across Oghoni land
iii. A Health assessment team is being mobilized to develop a medical registry.
iv. Water testing and air pollution facilities are being sourced
v. Land has been donated for ‘Centre of Excellence’ for environmental restoration and for the proposed Integrated Soil Management Centre
vi. Key Stakeholders Meeting across Oghoni land is being held.
vii. 24 hour Emergency Call Centres is up and running among others.
HYPREP’s robust programme is intended to begin the process of environmental remediation, which if not checked, will completely destroy the ecosystem of the Niger Delta. The task at hand is enormous because new areas are continually being damaged by pipeline vandalism, artisanal refining and crude theft.
Looking Ahead: The PIB
The government has during this period submitted an updated Petroleum Industry Bill (PIB) to the National Assembly for consideration and passage. The PIB will provide for a transparent regulatory framework and competitive fiscal rules of general application. The Ministry of Petroleum Resources has focused on building consensus around the key features of the Bill and encouraging the National Assembly to speedily consider and pass this landmark legislation.
However, passage of the Bill is only the beginning. A transitional process will have to be stewarded especially with the anticipated creation of new institutions to ensure proper governance. It is in the light of this that special task forces were set up which have been the catalysts driving our ability to deliver transformative change namely:
1) Petroleum Industry Bill technical committee which was set up to review all sections of the PIB and harmonise existing different versions to produce a draft copy to the National Assembly. As you are aware, the PIB is awaiting passage in the National Assembly.
2) Governance and Controls task-force which was set up to review management controls within parastatals under the Ministry of Petroleum with a view to designing a new corporate governance code for transparency, good governance and best practices.
3) Petroleum Revenue task force which was set up to verify all petroleum upstream and downstream revenues payable to government and integrate system and technology across the petroleum value chain.
4) National Refineries task-force which was set up to assess the performance of the domestic refineries and make recommendations for improving efficiency and commercial viability of the refineries. The task-force was also to create several tools for tracking performance and evaluating the business case for new refineries.
These challenges will continue to drive innovation and change in our approach to delivering an oil and gas industry that is internationally competitive and is governed by open and transparent processes to ensure security of investment for both domestic and international investors.
Ladies and gentlemen, this is the mid-term scorecard of a four year relay race. We are committed to serving the best interest of the Nigerian nation.