How sustainability of ‘7big wins’ will improve Nigeria’s oil production

Attack on oil and gas facilities in the oil-producing region of Niger-Delta remains one of the biggest challenges for government and investors in Nigeria’s energy sector. It also creates health and environmental concerns for people living in the region. KINGSLEY JEREMIAH writes that the solutions provided through the federal government’s roadmap for the sector otherwise called the ‘7 Big Wins’ if sustained could create long-term leeway to peace in the region.

Statistics provided by the Nigerian National Petroleum Corporation (NNPC) showed that Nigeria had from January to November 2016 lost over 130 million barrels of crude oil to the activities of 32 militant groups in the oil-producing region.

The revelation was further buttressed by another release, which indicated that NNPC’s subsidiary alone, the Nigerian Petroleum Development Company (NPDC) lost over N1.5 trillion due to attacks on its facilities in 2016.

To underscore the consequence of the situation, Group Managing Director Maikanti Baru, who made the revelation then said: “In 2016, for example, NPDC alone recorded 59 security incidents resulting in crude production shut down/deferment and revenue loss of over N1.5 trillion. At industry level, we are all conversant with the seriousness and frequency with which national assets in form of pipelines, flow stations are vandalised and crude oil and white products stolen with impunity.”

Indeed, Nigeria’s inability to meet up with projected production and oil reserves as well as growing environmental challenges are few fallout of the impacts of militancy activities in the oil producing region. Statistics showed that the country’s peak production was achieved in 2010, when output stood at around 2.8 million barrels per day.

The concern for most agitators in the region are related to the exclusion from important decision-making processes and the conviction held by extractive host communities that a share of the immense wealth extracted from under their feet neither reaches their pockets nor translates to tangible development for their communities, Chief Executive of CSR-in-Action, Bekeme Masade has said.

Reviewing how the militancy challenge affected the country before the launch of the roadmap about two years ago, Minister of State for Petroleum, Ibe Kachikwu, painted the picture of the devastating state of oil infrastructure in the Niger Delta, stating that the challenge had kept the oil industry at the lowest point.

While the militancy problem in the region almost grounded oil production capacity to less than a million barrel per day, it is laudable that the output has in recent time, risen to over 2.25 million, thanks to the peace deals, which created ceasefire against oil assets.

The ‘7 Big Wins’, launched in 2016 aimed at addressing issues of policy and regulation, business environment and investment drive, gas revolution, refineries and local production capacity, Niger Delta and security, transparency and efficiency, as well as stakeholder management and international co-ordination.

In the area of Niger Delta and security, Kachikwu had stated that government would continue to sustain engagement, address environmental challenges, especially the Ogoni clean up and the target to end gas flaring as well as channelling investment into meeting infrastructural gap and building capacity and economic empowerment.

To most experts, though government had said investment worth over $40 billion has gone into the region in recent years, strengthening implementation of key projects to ensure that the right people benefits from the programmes remained critical.
What government achieved through ‘7 big wins’

Explaining what government had done through the policy, Kachikwu said touring the region and creating understanding by engaging the militants and launching community engagement through the leaders yielded meaningful results.

“We have had series of ceasefire, which helped us to bring back production volume. We were able to move production from all low of 800, 000 bpd to 2.2 million bpd,”

He said addressing infrastructure challenges through the creation of modular refineries; with about 10 refineries underway and the construction of the AKK pipeline would open up opportunities in the region when the projects become feasible.

“The area which I think we have done a lot of work is in capacity building and economic empowerment. Over $40 billion has done into the region in a period of 15 years. What we have tried to do is to work with the Ministry of Niger delta, Ministry of Environment, Niger Delta Development Commission, NNPC, oil companies and everybody to be able to show the share of money that has gone and the money that will still go in,” the Minister said.

Kachikwu noted that the approach has helped the government to produce a report on the inputs from different organisation. His aide on Niger Delta affairs, Charles Achodo, had recently said about N1.7 trillion would be invested in the oil-producing region by the Federal Government, International Oil Companies and others in the next three years.

Kachikwu had admitted that more work is still required in region, adding that government has not only resolved to monitor every player but set up state technical committees that would ensure that the plans become reality, with a complete blueprint, local intervention and engagement to address the burning issues in the states.

“A lot of work needs to done. State committees must be sustained and we must complete the process. They must be a active and ensure that the local populace are getting the opportunities. There are regulatory interventions; the national assembly is working hard on the Petroleum industry Bill. When the bills are passed it will give legal parameter to some of the interventions that are important and create a sustained platform for the interventions in the future, he said.

He noted that the government would prioritise the Ogoni clean up as it has directed that funds meant for the project be release as quick as possible, adding that plans are underway to make communities take ownership of oil assets, especially the pipelines to ensure people benefits from the economic activities.

Experts call for sustainability of progrmmme
While there have been series of warnings recently by the militants and leaders from the region, asking the federal government to be sincere with its promises to the region, the Delta State Women Leader, Host Communities of Nigeria (Producing Oil and Gas) Delta State Chapter, Omude Ochonogor-Ochibe insisted that the federal government must ensure proper implementation of projects in the region by acting proactively.

Industry players like the former President of Nigerian Association of Petroleum Explorationists (NAPE) Abiodun Adesanya, who lauded government’s efforts in maintaining peace in the region, noted that the efforts must be sustained to grow Nigeria’s crude oil reserves and daily production to 40 billion barrels and four million barrels per day, as projected.

Director, African Centre for Corporate Responsibility, Austine Onuoha stressed on the need to address the disconnect between government and the people living in the oil communities.

He insisted that government must find a way to cut the manner in which young people are being recruited into crimes, especially militancy and terror group.

Onuoha noted that most people in the region do not have effective means of addressing their grievances, adding that government and companies operating in the region must empower the people by engaging them.