Restoring sustainable peace in the Niger Delta should be our foremost agenda, says Okoroafor
Bank-Anthony Okoroafor is the Chairman of Petroleum Technology Association of Nigeria (PETAN) and Managing Director/Chief Executive Officer of CB Geophysical Solutions Limited and Vhelbherg International Limitd. In this interview with ROSELINE OKERE, he outlined programmes for the WAIPEC conference and emphasized the need for sustainable peace in Niger Delta. Excerpts
The Petroleum Technology Association of Nigeria (PETAN) will launch the inaugural West African International Petroleum Exhibition and Conference (WAIPEC) taking place 21 to 23rd February 2017 in Lagos. What informed the decision to embark on this kind of conference?
There has never been an operator-service sector engagement conference by the industry for the industry. PETAN therefore decided to start one. This is unique and specially designed by the industry for the industry. There are strategic sessions, technical sessions, exhibitions that really structured by the industry for the industry.
What are the main objectives of the conference and how would it promote the development of the Nigeria’s oil and gas sector?
The main objectives of the conference is to bring together experts from the entire upstream, midstream and downstream oil and gas value chain; to stimulate discussions on the directions, opportunities and challenges of the regional oil and gas industry; networking face to face with key stakeholders in upstream, midstream and downstream sectors; creating opportunities for businesses and building new regional partnerships; sharing strategic industry experiences and technical expertise; and promoting Nigeria and West Africa oil and gas opportunities.
Do you think the Federal Government has been doing enough to encourage investment in the country’s oil sector? Which areas of the industry do you think the government should focus on?
We need to do more of exploration to increase our reserves thereby improving our country investment attractiveness. The government for now should focus on improving the security of lives and assets. There should be a sense of urgency on this. Restoring sustainable peace agreement in the Niger delta should be our most important agenda on the table now. This should be treated with all urgency. Restore confidence on security of people and assets in the entire Niger delta. In present-day Nigeria, Oil accounts for 95% of foreign exchange earnings and 75 per cent of government revenue for Nigeria.
The Organisation of Petroleum Exporting Countries (OPEC)’s decision to cut production in order to boost prices seems not to be working as prices have remained below $60 a barrel. Do you think cutting production will ever push prices above $60 a barrel?
Crude oil production by OPEC is about 40 per cent of worlds crude oil and OPEC oil exports represent about 60% of the total petroleum traded internationally. OPEC is not the only determinant of crude oil price but its actions can, and do, influence international oil prices. Oil supply from outside the OPEC represents about 60% of world oil production. So changes in non-OPEC production can affect oil prices. Also oil prices are not only affected by actual non-OPEC production, but also by changes in expectations about future non-OPEC supply. For example, U.S. Shale, Soviet Union, North sea and others. Inventories act as a balancing point between supply and demand. There is a relationship between oil price and inventories.
Geopolitical and weather related events can affect oil prices. Any event that can lead to actual disruptions or create uncertainty about future supply or demand can lead to higher volatility in prices. Much of crude oil are located in regions that have been prone historically to political upheaval.
The Minister of States for Petroleum Resources said recently that the Government is looking at passing the Petroleum Industry Bill in parts. Do you think this is the right thing to do?
Yes. This is the proper way to go so as not to allow certain sections of the bill to derail the entire process that has not seen the light of the day for the past 10 years.
How do we make Nigeria self-sufficient in petroleum refining?
We can make Nigeria self-sufficient in petroleum refining by creating business friendly policies that encourage entrepreneurs to invest in refineries, by running our refineries as strategic business units, that will buy their crude, refine and sell, pay their costs without resorting to Abuja to pay contractors.
We can empower the refineries managing director to run them as strategic business units and remove all bureaucracies hanging over their necks. Once this is done, we can then hold them accountable to move from cost centre to profit centres. Any one that does not deliver can then be replaced with performers. Also Government should play its role and secure assets and people so that business will focus on those things that can create sustainable value. We must create a secure environment for investment to thrive in our place. We must encourage many more Dangote’s with good fiscal policies, no policy summersaults no matter the government in place.
The NNPC recently announced its foray into exploration in the Frontier inland basins, is this new venture economical, does it make sense at all?
We do not have much data in our frontier inland basins. Now with improvements in technology and seismic, it will do our country good in acquiring reliable data in the frontier inland basins.
Nigeria’s oil industry is fast losing its competitive edges. The country has lost market share in the global LNG destinations and rely heavily on imported fuel. Are these real issues to be worried about?
Importing fuel is not good at all. We ought to be a fuel exporting country. Adding value to the crude oil will make more money for Nigeria and also create more jobs. We need the right fiscal and monetary policies to make it attractive for investors in these areas.
How do we tackle the insecurity in the Niger Delta?
It is in the government interest to solve the Niger Delta crisis and pipeline vandalism in Nigeria because Niger Delta is the goose that lays the golden egg and this cannot change for a very long time. The insecurity of assets is a major source of concern for government, the oil industry and Nigeria as a whole. It is possible that the government moves to solve the protracted crisis in the Niger delta has not been fully communicated to the people. I still believe that what we need is a plan for the rapid development of the Niger delta area.
Those who fail to learn from history are condemned to repeat it. We must start with tangible developments that can create sustainable employments, entrepreneurs and ensure 24 hours power supply. By creating opportunities for many, businesses can thrive, the security of lifes and property can improve and we will not be discussing this bilateral agreement with neighbouring countries to import crude oil. All this will take time but the result will be sustainable and a win-win formula for both the Niger delta region and the government.
We should not fool ourselves that it will be easy but it will stabilize the goose that lays the golden egg – the Niger Delta region and our oil industry at large. Also government must continue to engage constructively and sincerely with the Niger delta no matter the difficulties. This problems took long time to manifest and cannot be solved easily. It will take time but will be solved.