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‘Nigeria’s shallow, onshore production output decreased by 70 per cent’

By Roseline Okere
04 August 2016   |   3:13 am
The renewed attacks by new militant groups in Niger Delta region since early this year have reduced Nigeria’s oil production in the onshore and shallow water by 70 per cent, according to operators.
Oil production facility

Oil production facility

The renewed attacks by new militant groups in Niger Delta region since early this year have reduced Nigeria’s oil production in the onshore and shallow water by 70 per cent, according to operators.

Stakeholders who gathered at the ongoing Nigeria Annual International Conference and Exhibition (NAIC!) organised by the Society of Petroleum Engineers (SPE) Nigeria Council, said that the country is now battling with zero production and zero revenue from these sources.

The Niger Delta militants have vowed to reduce Nigeria’s crude oil production to zero, making the country to record a 20-year low in output for the first time in 20 years.

The operators said that recent challenge of vandalism and outright destruction of oil and gas facilities has further curtailed Nigeria’s oil and gas production; power generation ability; reduced the inflow of revenue; escalated the cost of environmental remediation and provision of secondary health care facility replacement.

Speaking at the event titled: “Transparency in the oil and gas business: An Imperative for energy security and stability” the Chief Executive Officer of Seplat Petroleum, Austin Avuru, said the current fight against pipeline vandalism and crude oil theft in the region has not recorded the desired success and needed to be intensified as the act has continued. He said the country had continued to lose huge revenue owing to the bombing of oil pipelines by militants, and urged the Federal Government to effectively check the activities of militants and pipelines vandals in the Niger Delta region.

He added that the onshore and shallow water oil production, which boasts of over 200,000 barrels of oil and over 900 million cubic feet of gas production per day, is now been threatened by militancy.

Avuru believed that the country has the capacity to refine up to 1.2 million barrels daily by the year 2020 if the government gave necessary support to operators in the industry.

Also, the Managing Director, Nigeria Mid-Stream Business Unit, Chevron, Clay Neff, emphasised for the Federal Government to ensure transparency in oil and gas transactions.

He said: “Transparency should be more of collaboration among players in the oil and gas sector. It is fundamental in building investors’ confidence on the economy.”

The Council Chairman, SPE, George Kalu, listed the challenges facing the industry to include funding constraints a rising from cash call arrears, exchange rate differential in a cyclical oil price regime, high operational costs due to long contracting cycles time and severely delayed payment to vendors.

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