IPPG demands enhanced operating environment
Sopuruchi Onwuka
The indigenous petroleum producer group has called on the government to arrest worsening security and safety issues that have traditionally bedeviled the Nigerian upstream oil and gas industry operations.
Chairman of the Independent Petroleum Producers Group, Mr Abdurasaq Isa, declared at the 2022 Nigerian International Energy Summit (NIES) that insecurity in the operating environment and associated impact on the operations of the industry have become serious threat to investments and the future of the industry.
The Oracle Today reports that rising insecurity, vandalism of petroleum production facilities and outright stealing of wellhead hydrocarbon liquids form part of the major reasons major multinational oil players in the country are divesting their vulnerable onshore and shallow water asset in preference for safer and less accessible deepwater operations.
Mr Isa is not alone in the call to address issues in the operating environment.
The Managing Director of Nigerian Liquefied Natural Gas (NLNG) Limited, Mr Phillips Mshelbila, had at the last Business Forum of the Nigerian Gas Association (NGA) called on government to find out and address the reasons deep pocket oil investors are shrinking down their presence in the country.
Mr Mshelbila had pointed out that the issues affecting investment in the Nigerian environment transcend the highly publicized fiscal reforms in the industry, adding that the drift from onshore to deepwater by international investors has not abated.
Mr Mshelbila was alluding to ongoing divestments by Shell, Total, Agip, ExxonMobil and Chevron as they concentrate activities in the deep offshore terrains of the country and scale down their bureaux in Nigeria.
In reiterating the urgent need to arrest safety and security of investments in the industry, Mr Isa who is also the Chairman of WalterSmith Petroman, pointed at the rising volume of production the independent producers lose to thieves in the country.
He said stealing of produced liquids from facilities pose existential threat to the entire industry, pointing out that production losses reached as high as 90 percent for some producers in 2021 alone. He described the operating situation as unprecedented and unsustainable.
“Such monumental losses attributable to theft are a major threat to our business, revenues to government as well as to national security,” he stated, adding that the IPPG members, who actually bought off troubled assets from departing multinational firms, bear the full brunt if the menace.
At the current strength of oil prices, he noted, high volume production losses would translate to huge revenue losses to the investors, government and other stakeholders.
He said IPPG was willing to assist government arrest the security challenges.
He said that this would enable Nigeria to capture the gains of the global energy market.
