The Independent Petroleum Producers Group (IPPG) has issued a call to action to address declining production levels and under-investment in Nigeria’s oil and gas sector.

This appeal was made by Abdulrazaq Isa, OFR, Chairman of IPPG, during his keynote address at the 2024 NOG Energy Week in Abuja.

Isa highlighted the concerning state of Nigeria’s oil and gas industry, noting that despite having over 37 billion barrels of proven crude oil reserves and significant gas reserves, the country’s daily production has dropped to approximately 1.3 million barrels of oil and 8.5 billion cubic feet (bcf) of gas. He pointed out that this is significantly below Nigeria’s capacity and 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 of the national budget and domestic refining capacity,” Isa stated.

In response to this alarming trend, the IPPG is calling for urgent measures to be undertaken by all relevant stakeholders to immediately address this development.

Isa stressed that “as a matter of national importance, Nigeria must act fast and hasten the pace of recovery across the entire industry.”

Isa outlined several priority areas for immediate action:

Swift Approval of IOC Divestment Transactions: IPPG advocates for the swift approval of pending divestment transactions by International Oil Companies (IOCs). He noted that member companies like Seplat, the Renaissance Consortium, and Oando have the proven track record to manage these onshore and shallow water assets effectively. This could lead to incremental production of 100,000 to 200,000 barrels of oil and over 1.5 bcf of gas per day within 24 months, and potentially over 500,000 barrels of oil per day in the long term.

Deepwater Development: Addressing issues around deepwater development and competitive fiscal regimes with major oil companies could unlock an additional 700,000 barrels of oil per day, significantly boosting production and economic benefits.

National Value-Retention Strategy: Implementing a strategy to ensure that domestic crude oil and gas production sustains Nigeria’s refining and petrochemical demand. This could transform Nigeria into a net exporter of refined petroleum and petrochemical products, generating additional foreign exchange and driving rapid industrialisation of the economy. The goal is to grow daily production to 2.5 million barrels per day of oil and 10 bcf of gas in the near to long term.

Acceleration of Nigeria’s Gas Resource Development: Exploiting Nigeria’s vast gas resources with a focus on restoring and expanding LNG production and enhancing domestic gas utilization is essential. This includes addressing the gas infrastructure deficit and leveraging International Oil Companies for export gas and IPPG members for the domestic gas agenda, with the Nigerian National Petroleum Corporation Limited (NNPCL) leading the charge.

Isa emphasized that these priority areas offer the most realistic and sustainable pathway towards meeting Nigeria’s long-term production aspiration of 4 million barrels of oil per day and 13 billion cubic feet of gas per day.

Reiterating IPPG’s support for government policies, Isa called for urgent action, suggesting the declaration of a state of emergency in the sector.

He emphasized the need for collaboration between industry regulators (NUPRC and NMDPRA) and industry operators (NNPCL, OPTS, and IPPG) to unlock the industry’s full potential and achieve national production goals.