SHELL News| Nigeria needs a lot of money to increase oil production

SHELL News| Nigeria needs a lot of money to increase oil production

Shell Petroleum Development Company of Nigeria has said that it was providing the sum of $10 million as take-off fund and contribution towards the clean-up of Ogoniland.

The oil firm further expressed its commitment to the remediation of oil impacted spots in the area.

SPDC General Manager, Internal Relations, Mr. Igo Weli, explained that funds that would be used for the clean-up of Ogoniland would be available based on the Joint Venture and budgeting process with the Federal Government.

Weli spoke while briefing journalists in Port-Harcourt on Saturday, added that while the Federal Government through the Nigerian National Petroleum Corporation would make available 55 percent, Shell would provide 30 percent.

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He stated that Total Exploration and Production was expected to contribute 10 percent of the funding for the clean-up of Ogoniland while Eni’s Agip would provide five percent.

 Minister also said Nigeria Requires N3.05 trillion to increase oil production 

He added, “SPDC JV commits to support HYPREP and the HYPREP Project Coordinator, Dr. Marvin Barinen Dekil, in the clean-up process. SPDC JV has made available the $10million take-off fund for HYPREP as part of its contribution towards funding its share of the Ogoni Restoration Fund.

“SPDC JV remains fully committed to continue supporting and contributing its share to the ORF within the appropriate framework and governance structures. We encourage all relevant stakeholders to also remain committed to contributing their quota to the Ogoni Restoration Fund.

Explaining that the actual clean had not begun because the Hydrocarbon Pollution Restoration Project also known as HYPREP was still expected to present a programme for the exercise, Weli stated that the situation had nothing to do with lack of funds.

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The Nigeria’s oil and gas industry would require $10 billion (N3.05 trillion) over the next three years to increase crude oil production from 2.2 million barrels per day (bpd) to 3 million bpd.

The Minister of State for Petroleum Resources, Emmanuel Ibe Kachikwu, who made this disclosure in the current Organisation of the Petroleum Exporting Countries (OPEC) Bulletin, said investment is needed to maintain essential work.

According to Kachikwu, “Nigeria’s normal production level is about 2.2m bpd and the government would like to raise it to 3m bpd. Just to get the fields online and cap them will require an average of about $10 billion per year in investments over the next three to four years.”

There are also some dedicated projects in the Bonga oil field, he added, noting that Italy’s Agip plans to spend about $10 billion, while Royal Dutch Shell is hoping to spend $10 to $11billion on the field.

“We are fairly close to identifying dedicated investments upstream. Downstream is a challenge. We need to invest in our refineries. We need to do pipelines.”

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He put the industry’s infrastructure gap in the midstream and downstream to be about $30 to $40billion, saying that some of the required investments could come from Nigerians with investment capabilities, rather than being restricted to investors abroad.

Kachikwu also commented on refining direct purchase agreements, which were introduced last year, as well as associated crude-for-product exchanges, stating that refineries are not working well, and are only producing about 10 to15 per cent of the country’s requirements, with most products being imported.

To tackle the problem, the Petroleum Ministry decided that rather than have middlemen sell Nigeria’s products and (import finished products), it tried “to achieve synergy by giving the crude to an established refinery to process it and bring it back to us.”

He added that the move was “worth the effort,” as it saved the country billions of dollars in his first year as Minister, adding that the refineries would be repaired hopefully between 2019 and 2020.

“But over and above that, we want those involved in this trading to begin to invest in refineries. I think it’s a shame that we are still importing so much product. When the government came in two years ago, that was a major concern for us.”

Currently, he said supplies are better, but there is still a fundamental need to focus on local demand.

The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr Maikati Baru, said recently that with improved security in the Niger Delta, and resumption of production on the Forcados Oil Terminal, FOT, and Qua Iboe Terminal, QIT, pipelines, average national production is expected to grow and surpass the 2017 target of 2.2 million barrels of oil and condensate per day.

SHELL News| Nigeria needs a lot of money to increase oil production

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