The Federal Government has rolled strategies to strengthen the nation’s oil and gas industry as it grapples with the impact of the COVID-19 pandemic on the sector and the global economy.
The Minister of State for Petroleum Resources, Timipre Sylva disclosed this on Thursday at the Seplat Petroleum Development Company Plc virtual summit to mark its 10th anniversary.
Speaking at the inaugural summit with the theme, “Business Sustainability and Strategic Leadership in Africa, Sylva noted that the impact of the pandemic had resulted in production uncertainties, decline in crude oil demand, investment deferment and cancellation. Adding that the left government with huge revenue losses, employment and taxes.
According to the Minister, the FG had embarked on a number of strategies to cushion the effect of the COVID-19 on the economy. He listed the strategies to include curtailment of crude oil production, aggressive capital allocation to priority projects, placement of Industry-wide core cost curtailment measures, and diversification.
“Through the Nigerian National production corporation we have rolled out strategies to achieve $10 per barrel unit operating cost.” Adding that to ensure cost discipline, the FG had also adopted downward renegotiation of all contracts and other business obligations.
Sylva stated that government embarked on diversification of portfolio to non-oil businesses to cushion the effect of future crash in crude oil prices.
“We have declared this year 2020 as “the year of Gas” and have commenced the National Gas Expansion Programme (NGEP).
“On Jan. 16, we inaugurated an Inter-agency Committee saddled with the responsibility of coordinating our concerted efforts to ensure the penetration of domestic utilisation of LPG, encourage auto Liquefied Petroleum Gas, Compressed Natural Gas and Liquefied Natural Gas for the domestic market.
“This will drastically reduce the massive outflow of the nation’s foreign exchange currently being expended in the importation of Premium Motor Spirit (PMS),” he said.
Commending Seplat on its 10th year anniversary, Sylva described the independent oil producing company’s achievements as phenomenal and remarkable successes, adding that Seplat has recorded some key achievements in 10 years
He “It is worthy to note here that Seplat was awarded some assets based on the Federal Government’s aspiration to develop indigenous capacity in the Nigerian oil and gas sector about 10 years ago. Over the past 10 years, Seplat has recorded monumental achievements and has grown to become a leading independent upstream oil and gas company in Nigeria..
“One is successful acquisition of Shell Petroleum Development Company (SPDC) and Chevron Nigeria Limited (CNL), divestment assets and appointment as operator, operated nine drilling rigs, two swamp drilling badges and seven land drilling rigs and attained peak activity of eight drilling rigs in 2014.”
“They also increased daily crude oil production from approximately 14,000 barrels in 2010 to the current level of about 60,000 barrels within the first three years and sustained the average production, Seplat also increased Oben gas and processing capacity from 90 million scuffs to 465 million scuffs.
“Seplat is today a leading gas supplier to the domestic gas market with about 350 million scuffs supplied to the domestic market daily, this has contributed to the growth, the nation’s power development capacity and support the government diversification agenda. Seplat is currently operating and managing three flow stations and have achieved quite a bit, These achievements are commendable and need to be emulated by other indigenous oil and gas companies.”
Speaking also, the GMD of NNPC, Mallam Mele Kyari said, “Seplat is one of our efficient partners, this is reflected in the growth and achievement they have attained within the last 10 years.” Stating that the “key element of this business is the cost of production and a combination of this has made them one of our most cherished partners in this business, NNPC GMD said.
By Peace Obi