The founding MD/CEO of Seplat Energy and Executive Chairman of AA Holdings, Austin Avuru, has warned that Nigeria’s oil production has reached an emergency critical level.
Due to oil theft, he claims that some oil production wells don’t see 80 percent of their output make it to the terminals.
This was revealed by Avuru in a report titled “Reining in the Collapse of the Nigerian Oil Industry,” which was published on Thursday by the Africa Oil + Gas Report.
Read also: ASUU Strike: University of Ibadan shuts down, tells students to vacate hostels
He urged the NNPC and regulators to establish a “war room” strategy to address Nigeria’s growing problem of oil theft.
What Mr. Avuru has to say
He claimed that the term “crude theft,” which first appeared in the industry around 2010, has taken on new meaning with the surrender of entire export pipeline networks to vandals and illegal bunkerers.
He claims that 80 percent of the production injected into some pipeline systems (particularly in the East) does not make it to the terminal.
He revealed that nearly every producer is now devising “alternative evacuation” schemes that cost four to five times as much as pipeline export.
“The harsh reality today is that the IOCs are leaving; their decision is beyond our control as a nation; in fact, Shell and Chevron have divested from a total of 21 blocks in the last twelve years.”
Shell and ExxonMobil have announced that they are leaving the onshore/shallow water business entirely.
“In fact, I believe that by Christmas 2025, TOTAL will be the only IOC in a joint venture with NNPC.”
“The situation is the same with domestic gas delivery,” he said. “Even though we weave all the right slogans about the future of gas in Nigeria, I can only point to a couple of Nigerian independents who are investing in gas development and processing for the domestic market in the last 5 years,” he said.
He went on to say that the state of the Nigerian petroleum industry is a national emergency, with oil production down to about 1.4 million BPD and falling, including 600K BPD from deep-water drilling.
Domestic production has remained stable at around 1.2 billion cubic feet per day over the last five years, despite projections of 3.5 billion cubic feet per day.
“Of course, the collateral impact is the low level of power generation, which has remained stable at around 4,000 MW per say since 2015,” he explained.
Nigeria’s current oil production level, according to Avuru, can only be imagined when oil prices return to $60 per barrel, stressing that the situation must be treated as a national emergency.
What can be done: The NNPC and upstream regulators must establish a war room, or some other form of effective task force, to develop a blueprint.
It will be necessary to implant a well-organized transition of the IOCs, guided by a clear policy direction, from the retreating IOCs to a crop of efficient independents with the necessary resources.
He went on to say that NNPC’s solution of standing back and intervening through preemptive acquisitions is not a long-term solution.
Read also: Court sets date for hearing on arrest of Kano’s suspended anti-corruption chief
He also called for a deliberate policy-driven return to Nigeria’s traditional onshore/shallow water terrains, citing the fact that this belt still holds 80 percent of the country’s remaining reserves.
“Nigeria must address the twin challenges of pipeline reliability and community unrest.
These issues have become more acute, not because there is no solution, but because we have paid no attention to them for the past 15 years.
“To drive investments in domestic gas supply, Nigeria needs to match its gas slogan with effective, measurable policy actions,” he added.
If you missed it, here’s a reminder:
According to information obtained by our reporter yesterday, Tony Elumelu, Chairman of UBA Banking Group and Heirs Holdings, stated that theft is the reason Nigeria is unable to meet its crude oil production quota and benefit from high oil prices.
He claimed that oil thieves are stealing 95 percent of Nigeria’s oil production, citing the Bonny terminal oil theft, which should be receiving over 200k barrels of crude oil daily but only receives 3,000 barrels.
Get every Post-UTM, Admission, List, JAMB, WAEC, NECO, and Schools Resumption Date, Breaking News on your WhatsApp Status Now - To join, click the links below.
Join Television Nigerian Whatsapp Now
Join Television Nigerian Facebook Now
Join Television Nigerian Twitter Now
Join Television Nigerian YouTUbe Now
Join Television Nigerian Whatsapp Now
Join Television Nigerian Facebook Now
Join Television Nigerian Twitter Now
Join Television Nigerian YouTUbe Now
