The Petroleum Technology Association of Nigeria (PETAN) had its annual oil industry awards recently in Lagos, the event brought the stakeholders of the oil industry who converged to receive their awards based on their performances and contributions to the industry. PETAN members are mostly of the service division of the oil industry augmenting the upstream aspect which deals with exploration. The occasion was witnessed by Dr. Maikanti Baru, Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Chairmen, Chief Executive Officers (CEOs) including Managing Directors of oil companies both international and their local counterparts. It was also an opportunity to network among members and non-members including award recipients.
The GMD of NNPC started his address by thanking PETAN for recognizing excellence and rewarding it, “I recall in this very hall last year, they did honour me with the Local Content Champion Mantra”. The GMD described 2017 as an impressive year, “a lot of things that the association set out to do had been seen through including the Cash Call exit”. Baru revealed that the oil industry is able to create a point to assist PETAN members in particular and all contractors through a $200 million Nigerian Content Development Monitoring Board (NCDMB) fund. This closely complement the $100 million Nigerian Liquefied Natural Gas (NLNG) fund specifically for the NLNG contractors. Other operators will be encouraged in the industry to also set up similar funds to assist with liquidity that is required by the contractors to be able to deliver support to the oil industry. The bottom line is that “production has improved with the hovering of about 2.1 million barrels per day in the past weeks and I hope we will continue to do that despite the big challenges we are having in some of our major trunk lines.” The government has been working assiduously to include and engage the communities directly by considering their yearnings. Part of the plan of the government is to involve them in modular refineries.
Besides, 35 companies and organizations are already involved in construction of modular refineries and 13 have been licensed. According to the GMD, “For us as an industry, it is absolutely necessary that we give them whatever they required in terms of food stuffs and this increase a lot of works for PETAN members.” The industry is hoping with the exit of Cash Call that in 2018, there will be projects that need to be put in place to finance 2016 Cash Call arears. This will give room for a lot of works to be available for PETAN members both in terms of drilling and other activities. Baru noted that Chevron has taken the lead with project Tita and Falcon. Shell, another oil major, is bringing up a project that is expected to gulp about $1 billion which will be used for the period that the project will last. “I believe these are significance volume of works that will keep the industry busy.” Baru was optimistic that First E&P and Schlumberger joint funding technical agreement will further boost activities in the oil industry. “There are many other projects that we are looking at in order to finance the pre-2016 arrears JV Cash Calls. This is good tiding for PETAN members in the service industry.” The GMD disclosed that there will be a lot of integrity and innovative projects which will also be carried out by ExxonMobil, the multinational has shown interest in upcoming projects. The government is involved in lots of gas supply project to meet its target of 10 000 Mega Watts by 2020.
Speaking with industry stakeholders and assuring them of progress, Baru asserted that “There are many other high profile projects that we are looking at, the Asanos development for which we will soon have an FID. The Bonga south west, Zabazaba, Bosi, these are huge projects and our focus is to have FID as soon as possible.” He stated further that there are seven critical gas projects that will contain about 3.5 billion cubic feet (bcf) per day by 2020 to the domestic market. The Ajaokuta-Abuja, Kaduna-Kano pipeline will develop up to 3.5 gigawatts into the national grid and these projects will also pass through FID in 2018. Nigeria NLG Train 7 is being focused towards FID together with the existing plant.
The aspect of payment which is bothering the industry, Baru assured that NNPC is working closely with contractors and JV partners to ensure that normal industry payment practice within stipulated period is imbibed. Most delay payments of 60 days, 90 days, and 120 days will soon be of the past. The GMD implored CEOs and Captains of industry within the oil sector to pay PETAN members.
The NNPC helmsman emphasized on divestment which has been an ongoing process that NNPC is working with government on how it could be handled but decision is left with the executive. However, whichever decision is taken, it is an opportunity for PETAN members to ensure that they make a maximum use of it. He enjoined the Chairman, House Committee on Local Content, Honourable Emmanuel Ekon to remain committed on the Petroleum Industry Bill (PIB). NNPC is in dialogue with the National Assembly members on the PIB and this will be a major focus for the industry in 2018. The dialogue will ensure that some gray areas which are of interest to operators are taken into account. He told PETAN members that the Chairman of Local Content has given him assurance that all arears of interests will be enshrined in the new PIB in 2018. NASS will give them utmost priority.
Baru thanked all the recipients, corporate and individuals including, the selection committee for deeming it fit to select him and other awardees as worthy recipients. “We know the awards more than personal are recognizing what we have been doing, our commitment and drive and focus of the industry, it will only spurs us to continue this focus and we believe we are in the right direction and we will keep going,” Baru concluded.