Petroleum Ministry Plans to Engage Masses Apart from Buying Fuel in Filling Stations

The event that turns out to be the first press briefing hosted by Minister of State for Petroleum Resources, Chief Timipre Sylva, he promises a different approach on how he plans to improve and engage the masses order than buying fuel in the filling stations.

The minister touch on many issues concerning the sector, like Petroleum Industry Bill (PIB), refineries turn around maintenance, gas emissions, and gas flaring among others.

The full text of what the minister briefed the media is below.

Speech of Minister of State for Petroleum Resources to the Press

  1. To progress the consideration and passage of the overall Petroleum Legislation

The team working on the PIB is at the final stage of the harmonisation of all the existing versions from 2000 to date (2009, 2012, and 2018) with consideration to the concerns raised by the industry players to create an enabling environment for investors as well as appropriate Government take in all the oil and gas value chain.

Counting on the current harmony between the Executive and Legislatve arms of the Government, we are optimistic that both the Petroleum Industry Governance, Administration & Host Communities Bill on one hand and Petroleum Industry Fiscal Bill on the other will be passed within the first anniversary of this administration.

Special focus will be placed on the Midstream and Downstream sectors. Consequently, we are considering two regulators, one for the Upstream (the Commission) and another for the Midstream & Downstream (the Authority). The Midstream and Downstream sectors will particularly open enormous opportunities to local investors and consequently create massive job opportunities in the country. For example, investments will be available in pipeline engineering design, procurement & construction, terminal operations, pipe mills, fabrication of pressure vessels, storage facilities, pipe transportation and laying equipments, Refineries, Central Processing Facilities and also investment in Gas-based industries (Fertilizer, Methanol, Petrochemicals, LPG and CNG) etc. Open access for oil and gas transportation will be fully enhanced.

On the upstream side, we are coming up with more robust fiscal provision, acreage management, drilling-or-drop programme, etc. We are not only going to retain investors, multitudes will join the leagues of high-value operators.

  1. To address security situations around Oil and Gas Installation, specifically to curtail theft of petroleum product and crude oil

Current Containment Strategies
Currently, crude theft is being contained with the following;
• Legislation
• Security
• Surveillance
• Community Engagement
• Diplomacy

Reasons Why Crude Theft Lingers
• An active market for stolen crude and products
• Weak measurement and surveillance mechanism
• Weak and Inadequate sanctions
• Low cost and high incentive for theft.
• Lack of infarstructural development 
• Lack of community inclusion and engagement

RECOMMENDATIONS
• Technology for pro-active leak detection.
• Community participation in the oil and gas assets.
• Engage PTI in the training of unemployed youths in the region.
• Encouraging Modular Refineries.
• Continuous Sensitization of the Host Communities.
• Storage Facilities.

Other recommendations include:
• Revamp security architecture
• Increase supply to underserved areas
• Infrastructural development of the region 
• Incentives for the Host Community 
• Increase community stake-holding
• Design and enforce stiffer legislations
• Mobilise global community; traders, refiners, regulators, international groups.

  1. To enable the operations of the National Oil company as a responsive commercial enterprise

Various transformation processes are currently ongoing in NNPC – Growing from Business Unit Focus Areas (12 BUFAs) to Transparency, Accountability and Performance Excellence (TAPE). We are considering the Incorporation of NNPC and its existing Joint Venture Companies. Government is currently working on the modalities.

  1. To conduct bid rounds for marginal and opportunities within 2020 and to ensure settlement of dispute partners and pave way for FID on major capital projects.

New Gridding, acreage management and bidding process are thoroughly elucidated in the upcoming Petroleum Industry Bills. It is therefore highly desirable that the Bills are passed before any bid round. This is one of the reason we implore Nigerians to support us in our quest to pass the bills in earnest.

  1. To deepen domestic gas utilization and overall monetization of gas resource

As you are aware, Natural gas has the capacity to transform an economy. We have seen successful examples all over the world. Qatar has the world’s highest GDP per Capita – its growth anchored on natural gas. Saudi Arabia has positioned itself as the world’s hub for petrochemicals, creating significant job opportunities and enabling industrialization of the country.

Nigeria’s gas reserves is significant. Nigeria current 2P gas estimate is about 202TCF with potential for up to 600TCF in undiscovered resources. With the undiscovered potential, Nigeria could be in the same league as Iran, Qatar, Saudi Arabia and Russia.

Recognizing the potential of our enormous natural gas resources and the unprecedented growth in domestic gas demand, the Federal Government of Nigeria through the Ministry of Petroleum Resources over the years has championed various interventions to stimulate gas utilization and monetization. This led to the Gas Master-Plan Policy initiative where detailed major gas infrastructure expansion and integration, gas supply development projects, revamp of the commercial framework for gas and tactical efforts to accelerate gas supply to Power sector, in addition to our gas industrialization strategy for investments in Fertilizer, Methanol, Petrochemical, CNG and LPG are fully stated.
Also the Ministry of Petroleum Resources is driving the Nigeria Gas Flare Commercialization Program (NGFCP). This initiative is designed as the strategy to implement policy objective of the FGN for the elimination of gas flares with potentially enormous multiplier and development outcomes for Nigeria. The objective of the NGFCP is to eliminate gas flaring through technically and commercially sustainable gas utilisation projects developed by competent third party investors who will be invited to participate in a competitive and transparent bid process.

The Federal Executive Council in June 2016 approved the Nigerian Gas Flare Commercialization Programme (NGFCP).

The FGN ratified the Paris Climate Change Agreement, and is a signatory to the Global Gas Flaring Partnership (GGFR) principles for global flare-out by 2030 whilst committing to a national flare-out target by year 2020.

The FGN called for Expression of Interest (EoI) in the Nigerian Gas Flare Commercialization Programme (NGFCP) in November, 2018.

Over 850 interested parties registered their interest in the NGFCP. 205 Applicants emerged successful and all 205 companies will be invited to submit their proposal for flare gas utilization through the Request for Proposals (RfP) phase of the NGFCP.

The commercialization approach has been considered from legal, technical, economic, commercial and developmental standpoints.

It is a unique and historic opportunity to attract major investment in economically viable gas flare capture projects whilst permanently addressing a 60 year environmental problem in Nigeria.

About US$ 3.5 billion worth of inward investments is required to achieve the gas flare commercialisation targets by 2020.
The analysis also shows that the NGFCP will deliver significant social and economic benefits to host communities in gas-rich regions of the Niger Delta, to investors and to the national economy. Benefits would include:

a. curbing pollution in local communities;
b. providing households with clean energy, particularly LPG (cooking gas);
c. job creation, particularly in small and medium scale businesses;
d. increasing electric power generation potential through gas-to-power; and 
e. alleviating social unrest.
f. The NGFCP could generate approximately 300,000 direct and indirect jobs

Once operational, projects launched under the NCFCP would reduce Nigeria’s emissions by ~13 mln tons of CO2 per year, consistent with the President’s commitments to the reduction of Greenhouse Gases under the Paris Climate Change Agreement [which could also be monetized under an emission credits / carbon sale programme at a value range of US$400 – 500million]

On the gas export market, part of our strategic aspiration for gas is to strengthen our footprint in high value gas export through LNG and aim to secure about 10% of global market share of traded LNG. On the expansion of our existing 22MTPA NLNG plant, we took Final Investment Decision (FID) for additional 8MTPA NLNG Train 7 Plant last December.

Additional Information
i) Finalize rehabilitation of refineries and other midstream infrastructures and emplacing Operarating and Maintenance (O&M) contracts for the management of the assets.
ii) Review existing gas policy, national policy on methanol fuel and other regulations to align with the competitiveness of the world’s O&G investment environment while taking cognizance of our quest to power our manufacturing and production industries.
iii) Focus on the reduction of production costs and contracting cycles by encouraging low cost producers.

Timipre Sylva
Honourable Minister of State

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