Reforms afford rare opportunity to optimize petroleum value—Avuru
The coincidence of divestment programs in the upstream, revival of processing investments in the midstream and price correction in the downstream all hold strong potentials for optimization of Nigeria’s petroleum resources.
Industry leader and eminent investor, Mr Austin Avuru, declared at the just concluded Africa Energy Week (AEW) in Cape Town, South Africa, that the prevailing policy and regulatory environment requires efficient implementation strategies to transformation the country from commodity exporter to energy product supply factor.
Mr Avuru who featured along ministers and diplomats on the Elephant Stage stated that the ongoing development of key infrastructure backbones by the Nigerian National Petroleum Company (NNPC) Limited also portends commercial viability for investments in gas harnessing and processing.
He added that tariff correction in the electric power sector also signals effective demand capacity for the domestic gas market.
Mr Avuru stated that what remains now was effective and efficient policy implementation strategies to deliver on the new industry mandate to recover oil output by about a million barrels per day to some 2.5 million barrels per day (mbd) in order to capture full economic potential of integrated industry operations.
With about 1.5:mbd of refining capacity in existing projects and plans, Mr Avuru noted, delivery of the presidential mandate to recover one million barrels per day has become imperative.
“If we get NNPC, BUA and other refiners to add to Dangote, we would boast of about 1.5 mbd of local refining capacity.
“What that means is that we will saturate domestic demand and begin export of refined products instead of the past 60 years when we were busy exporting crude oil,” he argued.
Recovery of a million barrels per day, he pointed out, would require regulators to match assets with capacity in the ongoing divestment and licensing programs.
He made it clear that only companies with strong and bold work programs can glean out bypassed, probable and potential reserves in mature fields currently divested by big international oil companies.
“The pattern is the same across the globe. As the IOCs exit mature assets, the independents step in to explore bypassed opportunities,” Mr Avuru explained, adding that the Niger Delta has reached the age of 2P and 3P reserves exploitation, stressing that only proficient players will adequate capacity would now deploy enhanced recovery techniques to mop up remaining resources in the terrain.
He called on regulators in the industry to ensure that only capable players are given opportunity to play in the mature terrain.
