The Independent Petroleum Producers Group (IPPG) has urgently called on the oil and gas sector to address declining production levels and under-investment.
IPPG Chairman Abdulrazaq Isa made this appeal during his keynote address at the 2024 NOG Energy Week in Abuja.
Isa expressed concern over the fact that despite Nigeria’s proven reserves of over 37 billion barrels of crude oil and significant gas reserves, daily production has dropped to approximately 1.3 million barrels of oil and 8.5 billion cubic feet of gas. He emphasized that this output is significantly below the nation’s capacity and falls short of globally acceptable standards.
“This reserve to production ratio is extremely low and a clear indicator that the industry is in a dire situation posing a risk to the implementation national budget and domestic refining capacity,” Isa stated.
The Oil Producers chairman noted that it was against the frightening backdrop that the IPPG was calling for urgent measures to be undertaken by all relevant stakeholders to immediately arrest the trend, stressing that, “as a matter of national importance, Nigeria must act fast and hasten the pace of recovery across the entire industry.”
Outlining the priority areas, Isa stated that the IPPG was calling for the swift approval of pending IOC divestment transactions.
“IPPG strongly advocates that our member companies – Seplat, the Renaissance Consortium and Oando – have the proven track record to successfully take over and manage these onshore and shallow water assets to realise incremental production in the region of 100,000 – 200,000 barrels of oil and over 1.5bcf of gas per day within 24 months and well over 500,000 barrels of oil per day in the long term,” he added.
The second priority area is Deepwater Development. According to the Independent Petroleum Producers Group (IPPG), resolving issues around deepwater development and implementing competitive fiscal regimes with major oil companies could unlock 700,000 barrels of oil per day, significantly boosting production and economic benefits.
Another priority area is the adoption of a National Value-Retention Strategy. This strategy aims to ensure that domestic crude oil and gas production meets Nigeria’s refining and petrochemical demands, ultimately transforming Nigeria into a net exporter of refined petroleum and petrochemical products.
This shift would generate additional foreign exchange and lead to the rapid industrialization of the nation’s economy. Therefore, it is crucial to increase daily production to 2.5 million barrels of oil and 10 billion cubic feet of gas in the near to long term.
The final priority area highlighted by the group is the acceleration of Nigeria’s Gas Resource Development. IPPG stated that exploiting Nigeria’s vast gas resources, focusing on restoring and expanding LNG production, and enhancing domestic gas utilization is essential.
This includes addressing the gas infrastructure deficit and leveraging International Oil Companies for export gas and IPPG members for domestic gas agendas, with NNPCL leading the charge.
Isa noted that these priority areas provide the most realistic and sustainable pathway towards achieving the national long-term production goal of four million barrels of oil per day and 13 billion cubic feet of gas per day.
Reiterating IPPG’s support for government policies, Isa emphasized the need for urgent action, even suggesting the declaration of a state of emergency in the sector.
He called for collaboration between industry regulators (NUPRC and NMDPRA) and industry operators (NNPCL, OPTS, and IPPG) to unlock the industry’s full potential and achieve national production aspirations.
