The Independent Petroleum Producers Group (IPPG) has made an urgent call to action for the oil and gas sector to address dwindling production levels and under-investment.
The call was made by the chairman of IPPG, Abdulrazaq Isa, in his industry keynote address at the 2024 NOG Energy Week in Abuja.
Isa decried the situation where despite having over 37 billion barrels of proven crude oil reserves and significant gas reserves, Nigeria’s daily production has dropped to approximately 1.3 million barrels of oil per day and 8.5 bcf of gas, adding that it was way below the nation’s capacity and by all globally acceptable standards.
“This reserve to production ratio is extremely low and a clear indicator that the industry is in a dire situation posing a risk to the implementation national budget and domestic refining capacity,” Isa stated.
The Oil Producers chairman noted that it was against the frightening backdrop that the IPPG was calling for urgent measures to be undertaken by all relevant stakeholders to immediately arrest the trend, stressing that, “as a matter of national importance, Nigeria must act fast and hasten the pace of recovery across the entire industry.”
Outlining the priority areas, Isa stated that the IPPG was calling for the swift approval of pending IOC divestment transactions.
“IPPG strongly advocates that our member companies – Seplat, the Renaissance Consortium and Oando – have the proven track record to successfully take over and manage these onshore and shallow water assets to realise incremental production in the region of 100,000 – 200,000 barrels of oil and over 1.5bcf of gas per day within 24 months and well over 500,000 barrels of oil per day in the long term,” he added.
The second priority area is the Deepwater Development. According to IPPG, addressing issues around deepwater development and competitive fiscal regimes with major oil companies could unlock 700,000 barrels of oil per day, significantly boosting production and economic benefits.
The adoption of a National Value-Retention Strategy is another priority area capable of ensuring that domestic crude oil and gas production sustains Nigeria’s refining and petrochemical demand and ultimately transforming Nigeria into a net exporter of refined petroleum and petrochemical products thereby generating additional foreign exchange and rapid industrialisation of the nation’s economy. It is, therefore, imperative to grow daily production to 2.5mbpd of oil and 10 bcf of gas in the near to long term.
The final priority area listed by the group was the acceleration of Nigeria’s Gas Resource Development. IPPG stated that exploiting Nigeria’s vast gas resources with a focus on restoring and expanding LNG production and enhancing domestic gas utilisation is essential and this includes addressing the gas infrastructure deficit and leveraging International Oil Companies for export gas and IPPG members for domestic gas agenda, with NNPCL leading the charge.
Isa noted that the priority areas provided the most realistic and sustainable pathway towards meeting our national long-term production aspiration of four million barrels of oil per day and 13 billion cubic feet of gas per day.
Reiterating IPPG’s support for government policies, Isa emphasised the need for urgent action, even suggesting the declaration of a state of emergency in the sector, and collaboration between the industry regulators (NUPRC and NMDPRA) and industry operators (NNPCL, OPTS and IPPG) to unlock the industry’s full potential and achieve national production aspirations.