Technology is the heart of all significant achievements in the oil and gas industry
Mr. Nosa Omorodion, (FNAPE) is President of the Nigerian Association of Petroleum Explorationists (NAPE) and Director, National Independents at Schlumberger. In this interview, he spoke on the impact the organization has made on its membership and the oil and gas industry generally.
Congratulations on your election as NAPE President, at a time the association turned 40, how much impact in your opinion has the association made on its membership and the oil and gas industry in general?
At 40 we certainly have come of age. Talking about impact on the membership, we continue to provide and enable platforms for interactions and sharing of best in-class technology and ideas that help to accelerate Nigeria’s 4mbo production target and 40bbo reserves. Our monthly Technical/Business meetings, the Continuing Education program consisting of Short courses, Field trips, Workshops and our Annual International Conference and Exhibitions are such platforms.
Associate members of our association have freely attested to the benefits of the business sessions. These meetings have served as a vehicle for subtle advocacy for the profession as well as a platform for deliberating on topical issues affecting our industry and the nation’s economy. The University Assistance Program is one program designed to bridge the gap between the oil and gas industry and the academia. Indigent students are given scholarships through a scheme called the Grant-in-Aid program. There are also various mentoring, career and capacity development programs such as the Imperial Barrel Award, Bain Evaluation competition etc and job fair opportunities for young professionals. By Q2 this year, NAPE intends to launch an HMO program that will cater for the health needs of its members and their dependants.
Nigeria currently maintains an economically unsustainable negative net energy trade balance in which the country exports virtually all the crude oil produced and imports a substantial part of its refined petroleum products needs while under-utilizing other energy sources like bitumen, coal, lignite and shale oil
On your inauguration as President of NAPE, you spoke about reforms in the association, what shape and form would these reforms take? Before I was elected President of NAPE last year, I was privileged to have served in various capacities in the executive committee of the association. The reforms will largely reposition our secretariat to be more service delivery. NAPE membership should be a pride to every geoscientist and current membership bottlenecks will be addressed unequivocally. The current membership application process will be strengthened and the application will be made easier. We shall remain the epitome for best practices in the delivery of professional knowledge, technology and experience. We shall be more intentional in our relationship with other subsectors of the Nigerian economy and making our voice heard in the socio-economic arena locally and globally.
How critical is the reduction in hydrocarbon exploration activities to the oil and gas industry in particular, and the Nigerian economy in general? It is very critical because the rate of production has not matched the rate of replenishment. Considering the time it takes to bring an asset on stream (to production) from when a license is awarded, it is indeed very troubling. Not many major discoveries of significant proportions have been made in the last decade and a half.
The recent increase in crude theft and vandalisation may just further impact investment and enthusiasm to find more oil and gas. There is the need for government and all stakeholders to revisit this trend and ensure we have in place some form of incentive / fiscal measures that will re-enact our exploration drive. We did this with the MOU in the past at a time the industry underwent a similar glut.
The 2016 national budget was predicated on a benchmark of 38 dollars per barrel and 2 million barrels production per day. Do you think these benchmarks are realistic based on current realities? I think it goes beyond the setting of benchmarks; a budget is an itemized summary of estimated or intended expenditures for a given period along with proposals for financing them. What is more critical for me are the priorities set in the conception of the budget. $38 per barrel is realistic, but I must add, a conservative approach by the government in view of the volatility in the oil market. The benchmark government set will encourage it to align its spending with resources available. If there is an upswing in the global price of oil, the government can remediate by sending a supplementary appropriation bill to the national assembly. Government must work assiduously towards increasing daily crude production volumes and reserves so as to at least sustain its target revenue.
The nation’s capacity for locally refined petroleum products increased recently. Is this trend sustainable and what other cost effective alternatives to crude oil refining would you advocate? The current realities make it most imperative for our local refining capacity for petroleum products to be up scaled. No economy can thrive with the complexion of Nigeria’s Energy Trade Balance. Nigeria currently maintains an economically unsustainable negative net energy trade balance in which the country exports virtually all the crude oil produced and imports a substantial part of its refined petroleum products needs while under-utilizing other energy sources like bitumen, coal, lignite and shale oil. Technology is the heart of all significant achievement in the oil and gas industry.
The future success of the oil and gas industry in Nigeria is heavily dependent on innovation and the rapid uptake of fit –for- purpose technologies that will reduce exploration and development risks, reduce costs and make the nation to remain globally competitive. My take on the issues of increasing the nation’s refining capacity is that modular and micro refineries be built in the “Niger Delta Economic Corridor” so that we get to pool together the current burgeoning illegal and unsafe refinery operators. I want to see a situation where the Federal Government adopts a strategy of standardized designs, streamlined and cumbersome-free approval process, so as to ensure an efficient turn-around time for construction to full operation of these refineries in 12 months.
Do you think the Nigerian Oil and Gas Industry Content Development Act is meeting the objectives it was enacted to address? The NOGICD Act has been good for the industry. Undoubtedly it has had its own challenges and we have sometimes witnessed a lot of overzealousness in the course of its interpretation and implementation. My understanding is that the act seeks to domesticate, enable and build capacity for many Nigerian companies. The thresholds prescribed in the schedule I am aware is currently being revised and industry as it is today needs to take advantage of the opportunity provided by the act to get more jobs done locally and help increase Nigerian content in all facets of the industry. However, in the area of exploration not much has been done and there is the need for the NCDMB to extend the same level of feverish enthusiasm that other sectors have witnessed. It is very pertinent to be clear that the NOGICD Act is not an indigenization act but an act that seeks to promote and provide participatory opportunities for Nigerian companies and Nigerians to compete. It is not an entitlement legislative act as it has tended to be misconstrued by a few.
The thresholds prescribed in the schedule I am aware is currently being revised and industry as it is today needs to take advantage of the opportunity provided by the act to get more jobs done locally and help increase Nigerian content in all facets of the industry. However, in the area of exploration not much has been done and there is the need for the NCDMB to extend the same level of feverish enthusiasm that other sectors have witnessed. It is very pertinent to be clear that the NOGICD Act is not an indigenization act but an act that seeks to promote and provide participatory opportunities for Nigerian companies and Nigerians to compete. It is not an entitlement legislative act as it has tended to be misconstrued by a few.
What issues would the association be focusing in this years’ annual conference and exhibition? At our last annual conference in 2015, we examined the Global Energy Dynamics and the Implications for Nigeria’s Energy and Economic Security. This year our focus will be The Nigeria Oil and Gas Industry – Current Realities. We want to continue that conversation and domesticate it further in line with the current realities in the oil and gas sector and the Nigerian economy. This certainly will be a perfect fit and I expect it will further provide a forum to review the journey and adjustments the industry has had to make in the wake of the global unstable oil price regime.
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