The Minister of Petroleum Diezani Alison-Madueke has raised an alarm that low oil prices constitute a threat to Nigeria’s plan to raise crude oil production to 4 million barrels per day (b/d) by 2020.
Alison-Madueke made this assertion at Nigeria Oil & Gas 2015 conference in Abuja, adding that
“persistent depressed oil prices may limit industry scope to manoeuvre in growing long-term production and reaching the target.”
Madueke argued the oil companies to come up with radical changes including innovative financing mechanism for new and ongoing projects.
However, industry operators at the conference agreed that global oil prices were not the only problem, adding that oil theft, growing security challenges, and an unstable fiscal environment also factors hindering growth of the oil sector in Nigeria.
Vice President, Nigeria and Gabon, Shell Upstream International, Markus Droll said
“oil theft and pipeline sabotage are activities that have no place in a lawful environment as it has severely affected Shell operations in Nigeria.In 2014 alone, we replaced over 300 theft points on our pipelines.”
Chief Executive Officer of Oando, Wale Tinubu, said “Oil theft in Nigeria is believed to be about 30 per cent of the country’s production, making Nigeria rank at the bottom in the world in terms of attracting investment into oil projects”.
Nigeria is losing over 250,000 b/d of oil to theft, according to industry estimates.
Droll said that the government needed to put in place a fiscal environment to make investment in the oil sector more attractive, adding that “Fiscal stability and predictability remain even more crucial today in ensuring investors of all sizes can commit confidently (and) government revenues can be forecast reliably.”
Finding has shown that Nigeria aims to increase oil output to 4 million b/d by 2020 from around 2 million b/d now, as well as lifting its reserves to 40 billion barrels from 32 billion barrels.
Picture and caption:Minister of Petroleum Diezani Alison-Madueke[attach 1]