The average Nigeria’s oil output dropped Year-on-Year, YoY, by 15 per cent to 1.5 million barrels per day, mb/d (excluding condensate), in 2020, compared to 1.7mb/d recorded in the corresponding period of 2019, according to data obtained from Organisation of Petroleum Exporting Countries, OPEC.
On Quarter-on-Quarter, QoQ, the nation’s oil output stood at an average of 1.75 mb/d in first quarter (January -March) of 2020, compared to 1.67 mb/d, recorded in the corresponding period of 2019, indicating a marginal increase of 0.05 per cent, Vanguard reported.
However, it dropped to 1.52 mb/d, 1.35mb/d and 1.28 mb/d in the Second, Third and Fourth quarters of 2020, against 1.77 mb/d, 1.82 mb/d and 1.67 mb/d recorded in the corresponding period of 2019, thus showing a decrease of 14.1 per cent, 25.8 per cent and 23.4 per cent respectively during the period under review.
This means that the Federal Government might not be in a position to grow the nation’s Gross Domestic Product, GDP – the final value of the goods and services produced within a country during a specified period of time, normally a year – driven mainly by oil and gas, soon due to limited output and a relatively low oil price of its Bonny Light, currently standing at $54 per barrel.
With the high production quota of the Organisation of Petroleum Exporting Countries, OPEC, and equally high crude oil prices, which rose to $140 per barrel, in 2008, Nigeria was able to boost its GDP in the past, but has not been able to do so in recent years.
In its latest brief obtained by Energy Vanguard, the Lagos Chamber of Commerce and Industry, LCCI, stated: “The Lagos Chamber notes the moderation in the magnitude of contraction in the third quarter of the year 2020, with real GDP growth rate slowing from 6.10 per cent in the second quarter to 3.62 per cent in the third quarter. We expect even less contraction in the fourth quarter.”
Diversification
However, President Muhammadu Buhari, and others have indicated interest to expand investment through the instrumentality of the National Oil and Gas Excellence Centre (NOGEC), and utilise petroleum revenues as a major instrument in diversifying the nation’s oil-dependent economy.
Speaking at the recent commissioning of the NOGEC, in Lagos, President Buhari, said: “The establishment of the National Oil and Gas Excellence Centre (NOGEC) aligns with my administration’s commitment to foster stability, growth and sustainability of the Nigeria Oil and Gas Industry consistent with the economic development and sustainability agenda articulated in the National Petroleum Policy 2017, National Gas Policy, 2017, Economic Recovery and Growth Plan (ERGP) and the Economic Sustainability Plan (ESP), 2020.
“At the beginning of my administration, we set a clear roadmap for the oil and gas sector in order to deepen value from the nation’s huge resource potentials and create opportunities for investors, both local and foreign, when I declared that: ‘Nigeria is Open for Business.
“I am delighted that since then, we have witnessed major Final Investment Decisions in the sector such as the AKK Pipeline project, the NLNG Train-7 project, and the completion of the 5,000barrels per day Waltersmith Modular refinery.”
He said: “Our renewed drive for economic diversification using the oil and gas industry as a pivot remains on track as we expand government revenues and deploy it to grow our Gross Domestic Product (GDP), generate employment and eliminate poverty – all for the overall benefit of Nigerians.
“This ceremony of the official launch of the National Oil and Gas Excellence Centre (NOGEC) – an integrated resource complex to drive Safety, Value and Cost efficiency in the Industry – is yet another milestone in the development of the oil and gas sector and the realisation of greater value for all stakeholders.”
Prospect
Also speaking, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said: “NOGEC has been carefully designed to support the achievement of the ministerial priorities – significant amongst which are cost reduction, increase in production, and value maximization in the industry.
The Centre, under the direct supervision of the Department of Petroleum Resources (DPR), will leverage the existing capacity of the National Data Repository (NDR) as the principal data warehouse of the industry to drive initiatives that will enhance Safety, Value and Cost-efficiency across all operations in the Industry.
“The establishment of the NOGEC is not only a response to a safer, cost-efficient and sustainable oil and gas industry, but also a strategic move to position Nigeria as the regional and global leader in cost efficiency, breakthrough solutions and value-added services for the industry.
“Accordingly, and to achieve the afore-mentioned three-prong value drivers of Safety, Value and Cost efficiency, the integrated NOGEC complex encompasses some units, including the Search, Rescue and Surveillance (SeRAS) Command and Control Centre, National Improved Oil Recovery Centre (NIORC), Oil and Gas Alternative Dispute Resolution Centre (ADRC), Oil & Gas Competence Development Centre (CDC), and Integrated Data Mining & Analytics Centre (IDMAC).”
Expectation
Furthermore, the Director/CEO, Department of Petroleum Resources, DPR, Engr. Sarki Auwalu, added: “The National Oil and Gas Excellence Centre encompasses industry-focused programmes that will drive strategic mediation in operations, skills and competence development, use of Big Data, Internet of things (IoT) and Artificial Intelligence (AI) for decision making, deployment of proven technology for secondary and tertiary oil recovery as well as a coordinated response for an emergency.
We have concluded the framework and implementation modalities for the successful take-off of these Programmes within the National Oil and Gas Excellence Centre due for imminent commissioning. We have no doubt that the Industry now has the resource and platform to interact, cooperate and collaborate on salient industry issues that remain impediments to cost reduction, safe operations and optimum value optimisation.”
Vanguard
