Lobby for Nigeria’s potential

How has Nigerian capacity evolved in the past years?
When the oil price fell, many of the operators stopped spending. When the operating companies stop spending, oil service companies do not get any jobs, or the jobs that they do get are not paid. It affected us a lot. Many of the companies had built capacities and trained people, so it was difficult to release some of the people. It affected the industry seriously. Bear in mind that the percentage of well intervention services in Nigeria is very low compared to all over the world. Nigeria has the lowest well intervention frequency globally. Nigeria also has the lowest workovers intensity globally.
Well intervention activities started creeping up with the low oil price because people were not drilling new wells. They had to start maintaining what they have. Lots of existing wells have locked-in opportunities. The operators started focusing on well production optimisation through increased well intervention. We started picking up a little bit but we are not there yet. The budget for well services must be ring-fenced. Every year we should spend at least 15% of our budget in well services. We thank God that the oil price is stabilising in the USD 70 range and activities are picking up.

How important is investing in exploration?
For the past 10 years, Nigeria has been carrying about 37 billion barrels of reserves. Angola was carrying 2 billion, today they have something like 9 billion. A small country like Ghana had zero when we were carrying 37 billion. Now it has almost 800 million.
We have not had any major discoveries for the past 10 years. We need to ring-fence budgets for exploration. We need to finance our budget for exploration, because the balance sheet of oil and gas goes down without replacement of reserves. We are not replacing, so we become less attractive. Your industry becomes attractive when you have good reserves. If your reserves are declining, it’s like a country where the balance of payments is going down. It’s strategic to do something fast, and to do it now.

How can gas developments stimulate growth in the country?
About 620 million people in Africa live without electricity. Imagine we use our gas to provide electricity to all of Africa. Today we have about 160 tcf [4.53 tcm] of gas. There are countries that only have 2 tcf [56.6 bcm], and they use it.
We should have the kind of leadership that says, “This is what you must do” and puts resources to it. We do a lot of talk, but resources have not been generated. If you want to have that kind of gas, you need to drill many wells. Somebody has to set a budget to drill these wells. If there’s no budget to drill these wells, no matter what we say, it’s nothing. Everybody says we need gas, we can do this, and if we have gas we can have our own electricity. But we need to put in a strategic plan and a budget. Without budget, all the talk is hopeless. You need at least 50 rigs drilling nonstop to get that. There is no budget for those 50 rigs, drilling continuously. We keep talking and nothing gets done.
Gas is big, it’s a clean energy and it can power a lot of Africa. It’s needed in petrochemicals and in fertiliser to do magic for agriculture. There’s so much we can do with gas, if we have the right fiscal policy and the priority, and the government sets the price. The signing of the gas flare commercialisation programme by the president is a step in the right direction, apart from reducing flare in-country, it is also an enabler for industrialisation.
The approval of the AKK gas infrastructure approved by the FEC in December 2017 is great because it helps to address the infrastructure deficit map of Nigeria in terms of gas pipelines. This is a 614-kilometre long natural gas pipeline expected to transport 3,500 mcf [99.1 mcm] per day of dehydrated wet gas from several gas gathering projects located in southern Nigeria. It will result in the establishment of a connecting pipeline network between the eastern, western and northern regions of Nigeria. It will create a steady and guaranteed gas supply network between the northern and southern part of Nigeria by utilising the country’s widely available gas resources. It will help reduce the large volume of gas flared annually in Nigeria, boost electricity generation capacity, strengthen the industrial sector, promote and increase the local usage of domestic gas and help the government to make more money and address some environmental and health issues from gas flaring.
How urgent is the development of the downstream industry?
Basically, we have refineries with capacity of 35,000-45,000 bopd; that is the capacity but not what they are making. They are now making up to 20%. Niger Delta Petroleum owns a 1,000-bpd modular refinery, and that’s where I buy my diesel.
The whole country cannot meet the demand because the refineries are not functioning optimally. There is so much importation, which is why there is so much pressure on foreign exchange. On the refinery side, there is so much potential: for petrol, diesel, kerosene and aviation fuel. I hope the refineries can come on stream and add capacity so we depend less on importation. That would be a great thing to happen to the country.

What have been the latest developments for Petan?
We stand for domestication of technology, and we want to build companies that can stand the test of time, not briefcase carriers. We have seen many of our members build capacities in different areas of the value chain. We have members now who have drilling rigs, who have dp2 vessels, who have the best seismic processing centres and who do the whole process of logging. Throughout the entire value chain, we have members who have bought equipment and trained people. People are your greatest asset in whatever you do. Our members have built a lot of capacity in terms of people, equipment and technology.
A way to sustain this is the just-launched Petan Seal of Quality. We are going to eventually call it the Oil and Gas Seal of Quality. Anybody that has that seal can carry-out that service in any part of the world. Petan has worked with Bureau Veritas International to come up with the satisfactory standard of equipment, processes, personnel, safety and quality. Once you have that seal, you should be able to perform that service to satisfactory standards and quality anywhere in the world. To domesticate technology, we need competence. We need excellence.

What would you want to have accomplished by next year as an institution?
Next year, the Oil and Gas Seal of Quality will be ready. You will see several companies with the Seal of Quality that can perform services anywhere. We are starting Petan new secretariat and Oil & Gas museum. We want to see major developments in the gas value chain. We hope Nigeria will be blessed with the right fiscal terms that will make it an investment-friendly country that will benefit the investors and the country. We want also a safe environment for business. With the election in February, if everything goes well, let the right candidates with the right vision rule the country.

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