Author Topic: NIGERIA WILL HIT 4M BARRELS DAILY CRUDE OIL PRODUCTION TARGET SOON  (Read 3286 times)

Offline Prince

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Nigeria will hit 4m barrels daily crude oil production target soon
? Anthony Abolarin, President of SPE
By LOUIS IBA
Thursday, August 19, 2010


Abolarin

 President of the Society of Petroleum Engineers (SPE) Mr Anthony Abolarin, says Nigeria could still meet its aspirations of raising daily crude oil production to four million barrels.

The Federal Government in 2001 had set a target of growing daily crude oil production capacity from the then two million barrels to four million barrels by the end of 2010. However, as the year gradually winds down, it appears that aspiration would remain a mirage, owing to major setbacks in the crisis that enveloped the Niger Delta region for a greater part of the decade, forcing most oil firms to shut down operations and even halt further investments in exploration activities.

Abolarin, while expressing optimism that the four million barrels per day crude oil production capacity would be met, however, expressed fears of realizing a similar target of hitting 40 billion barrels crude oil reserves discovery by the end of this year. Achieving both targets remain critical in boosting Nigeria?s source of foreign exchange earnings and sustaining an economy highly dependent on crude oil.

Abolarin, in this interview granted in Calabar, Cross Rivers State, said growing the capacity of the industry is one task that requires careful planning and the investment of requisite funds, time and manpower by all stakeholders in the execution of all earmarked projects.
Excerpts:

It is possible to hit four million barrels daily production
For today, what is most important for us is the daily crude oil production level and not the reserve level, because the reserves are more important for our strategic planning units at different levels, especially at government levels. I think the focus should be on the production base, which is of concern when we had the entire problem that led to the shutting down of production facilities by the oil firms in the Niger Delta.
But things are getting back and peace had returned and our productions are picking up, and we can comfortably rise to about two million barrels per day.

And with time and more exploration we should be able to proceed to the target of four million barrels of crude oil production per day soon. And I say soon because the initial date that we gave to ourselves was 2010. We have fallen behind but that also points out that no matter how you plan, factors that evolve can affect the planning.

But we can?t meet the 40 billion barrels reserves target
The government had set a target of achieving 40 billion barrels of reserves by the end of 2010. As Nigerians, we have to be ready to admit that we cannot meet that aspiration of reserves this year. It is too late to achieve that. But I want to say that the information that reserves has dropped, rather than increase, is something that should not be of great concern to the public.

In the sense that if you understand what reserves mean, it does not touch the public as at today. And the technicality of reserve evaluation is such a complex thing that it does not really require much public discussion. There are methods by which we gather that information. With a simple decimal change when you multiply it is a large volume.

When we say that we are targeting something, it doesn?t mean that we are absolutely going to attain that target. It is an aspiration for which we have to work hard to meet, and any organisation or country must always set targets if it wishes to grow. Targets mean we have an ambition or desire. So, as at the time that 40 billion berrels reserves target was set, from a professional point of view we knew it was a very difficult target.

I can target jumping the roof of this house but, as I leap, I may just end up jumping above a table. That is the way it is. It is good to aim higher. But as a professional, there are two critical issues that need to be resolved in estimating our crude oil reserves. The first is the availability of funds for projects that will boost the reserves. A nation must be ready to invest in exploration activities to be able to achieve the level of reserves that it wants. And that is where the problem arises.

Are we ready and capable as a nation to make that investment? The second is another kind of investment; the investment of time ? the amount of time that we plan to invest must be adequate to meet the target reserves that we have set for ourselves. If the time is too short ? from all practical point of view to accommodate all the logistics, technicalities and personnel or mobilize all the resources it may be difficult to realise the target.

And then there is this reality that you must meet the reserves there when you get there before you can declare them as reserves and in the petroleum industry we are used to all kinds of results and that is why the cost of our work here is usually very high.

You may go to a field thinking that you will make a very good find, but you may end up striking at something of a volume that is not economical or commercial to exploit. So we have to be sure that it is there. So it is not all the desires that can me bet. This time we couldn?t make it and we have to sit down again and think of how to get there.

And I will appeal that professionals should be called in to contribute in the discussion before it gets to a level where we have to announce targets or express desires that are out of line with reality. We could achieve it with planning and hard work but not counting on luck.

The problem between IOCs and FG over the PIB
I can tell you outright that the industry and the government are partners in progress and there is no crisis between the international oil companies and the government over the petroleum industry bill because every investment of a dollar in the industry is jointly shared between the government and the oil companies. Such a partnership does not warrant threat; it is an issue of partnership.

The operating companies will not threaten the government because it negates the principles of partnership. If your right leg wants to move and your left leg says it is not moving, then you can?t move. That is what is happening in the industry, so no one can threaten the other because it is a mutual understanding.
Any investment decision has to take cognizance of either existing or new laws or the evolving political situation. I will say that the stance of the IOC is normal with business risk assessment.

So there are only on a cautious part as regards the proposed PIB so they can make appropriate investment decision, it is not a withdrawal of investment but rather a re-assessment of terms of business and you will not as a smart businessman go into a business without comprehending the terms of the new law.

Delay in PIB passage hasn?t slowed down industry
There is serious work still going on in the industry. The companies are still investing. It will be wrong for people to look at the fewer number of exploratory wells being drilled now and then conclude that nothing is happening. The reality is that companies are still budgeting and going on with jobs. Perhaps more funds are being pumped into rehabilitation work like fixing pipelines that were vandalized during the era of restiveness in the Niger Delta region, and so much money is going into the restoration of security for infrastructure in the region.

So money is going somewhere. You cannot be doing exploratory work when you have not restored the facilities that will take care of the volume of end products to the market. Today the focus is in fixing the infrastructure and getting it to the level of the pre-crisis era. And to do that a significant portion of your budget has to go to revamping, rehabilitation of facilities and that is why it may appear as if exploration is slowed down. I don?t think it is so.

Industry thrives on long-term decisions
Investment in the industry is not a three-month decision; it is a long term decision. And that is why we operate five years to ten years long planning term. So when you want to go and do an exploratory well, if you check the record, the first decision to go into that project may have been taken fifteen years ago even before eventual date of the start of work. There is always a long term planning in the industry, what is happening today in terms of the projects executed was thought about years back.

There are some oil fields which based on their characteristics will be left there for a period of time and exploited years to come. But there were already known fifteen years back. And those exploratory drilling that led to their exploration twenty years after, would you classify them as wasted years? If you say there has been only one exploratory well in the country it may be due to the environment. I recall that we had a period in the mid-80s we hardly had any rig operating in each of the companies. Why? The situation was such that there could be no exploration at that time.

Only in very rare cases that exploration was carried out. And we had rig counts that dropped because the situation was like production in Nigeria was going to drop and never to go up. But you now remember that shortly after that period, the country itself took certain steps and opened up more areas for exploration. You don?t search for what is in your hand. The areas we were operating did not require us to do more exploration in them again because they were over exploited. So we needed a different area to explore. As at today you will notice that we gradually moved from onshore to offshore to deep offshore to look for crude oil.

So we can?t now begin to say we are going to the onshore to do exploration because we are almost through with that region having probably explored all that is there because the number of wells that are exploratory will be reducing. And that is why we are going deeper and even deeper than before into the ocean to look for oil these days.

Peace has returned to the Niger Delta
We had chosen to hold this year?s conference in Calabar for strategic reasons to prove that peace had gradually returned to the region. Cross Rivers state happens to be one of the safest states in the Niger Delta and it was important to communicate to the world and all investors in the oil and gas industry locally and globally that indeed peace had returned and the Tinapa Resort offers a wonderful ambience for us to meet.
The government of the state partnered with us in this conference.

Capacity building challenges
Let me say this, you will begin to be hearing from us more on issues of national concerns. We have members in the various government agencies and some of the policy changes we are witnessing in the country were initiated by our members. We are not a political associated that will be talking in the media all the time. The PIB we made contributions and we have been engaged in every major industry decision.

Research and development is a project within the industry and every dollar spent on it is shared between the industry and government owing to the joint venture agreement that exists between the two parties. So every dollar is a joint dollar; so the country must be ready to do its part and research must be done to keep the industry going. We have moved from onshore to offshore to deep-offshore and ultra deep offshore. And for us to keep going we have to invest as Nigerians in effective research and development.

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Offline Prince

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Re: NIGERIA WILL HIT 4M BARRELS DAILY CRUDE OIL PRODUCTION TARGET SOON
« Reply #1 on: August 19, 2010, 02:49:29 PM »
This never change the lives of ordinary Nigerians, Nigerian govt remain one of the richest govt, while Nigerians remain one the poorest people in the world.

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Re: NIGERIA WILL HIT 4M BARRELS DAILY CRUDE OIL PRODUCTION TARGET SOON
« Reply #2 on: November 09, 2010, 08:27:23 AM »
what does this INCREMENT mean to the common man in the street.
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Offline gmiw.ng

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« Reply #3 on: December 06, 2010, 08:02:59 AM »
It means more problem to the masses. B'cous it implies much more do or die election.
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Re: NIGERIA WILL HIT 4M BARRELS DAILY CRUDE OIL PRODUCTION TARGET SOON
« Reply #4 on: December 18, 2010, 10:26:55 AM »
so far there is no corresponding improvement in the standard of living of nigerians,that news is as good as letters written on dust.
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Re: NIGERIA WILL HIT 4M BARRELS DAILY CRUDE OIL PRODUCTION TARGET SOON
« Reply #5 on: December 21, 2010, 04:10:36 PM »
so far there is no corresponding improvement in the standard of living of nigerians,that news is as good as letters written on dust.

Very correct
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Re: NIGERIA WILL HIT 4M BARRELS DAILY CRUDE OIL PRODUCTION TARGET SOON
« Reply #5 on: December 21, 2010, 04:10:36 PM »

 

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