Pipeline vandalism, oil theft and illegal refining in the creeks of the Niger Delta have left unprecedented devastation on the economy and environment from which it could take the nation more than 20 years to recover.
The Minister of Petroleum Resources, Mrs. Deziani Alison-Madueke, made the declaration, when she took a swipe at the industry while presenting her ministry’s scorecard in Abuja, yesterday.
“It is clear that the incessant crude oil vandalism, theft and their illegal, what I call firewood distillers, which are not only taking away our oil from us, but are also greatly endangering and impacting the environment in those areas which the country may not recover from in the next 20 years or more”, she said.
The minister said that drastic measures must be adopted to halt the damage already done to the economy and the environment by the criminals that have been targeting the nation’s oil resources.
Her words: “It is clear that we have to do something very aggressive and very quick. We have worked very hard with multinational companies, security agencies and then we have put together a committee on this.”
Alison-Madueke disclosed that the nation have been suffering colossal damages in term of huge loss of revenue as according to her, criminals have consistently stolen about 500, 000 barrels of crude oil daily.
“Our crude oil production has consistently maintained above average of 2.3 million barrels per day despite the bunkering, but had gone up to 2.83 million barrels per day in October of 2010 and has gone back to maintaining 2.3 million average production,” she said.
The minister stated that her ministry has stepped up collaboration with multinational oil companies, security agencies and other stakeholders with a view to stemming the tide. She added that a committee to tackle the challenges of vandalism in the sector which has also affected the power sector of the economy.
Deregulation and gas supply
On the nation’s dependence on imported petroleum products, Alison-Madueke said that the only remedy remained the deregulation of the downstream sub-sector of the petroleum industry.
“We can’t eat our cake and have it, without deregulating of the downstream oil sectors, investors will not come and invest, so we must think of deregulating our downstream sooner or later for us to have a lasting solution,” the minister said.
Ahead of this, she said that Nigeria’s crude refining capacity is expected to increase by year end, as the Turn-Around Maintenance, TAM of the Port-Harcourt Refinery will be completed then.
According to her, work on the Kaduna and Warri refineries is expected to be concluded by the fourth quarter of 2014, adding that within the next 18months, the country will witness the establishment of independent refineries.
In the areas of gas, she disclosed that plans are on-going to link Abuja and the Northern part of the country with gas pipelines by 2015.
Alison-Madueke further said that the petroleum sector has witnessed great strides in the drive towards repositioning the nation as a gas exploration and production country over the last couple of months.
According to her, the on-going gas revolution has brought about a significant improvement in gas to power supply for electricity generation up to five gigawatts, GW, establishment of commercial framework for gas, massive development of gas infrastructure across the country and the stimulation of gas-based industrialisation with the Ogidigben Gas City in Delta State as the flagship project with a capacity to create 100,000 jobs at the construction stage.
She said, “Nigeria with gas reserves of 182 trillion cubic feet (Tcf) as at the end of 2012 compared with total crude oil reserves of 36.8 billion barrels for the same period is more of a gas country than a crude oil country and that the global shift to the use of gas as a cleaner energy makes the emphasis on gas development as directed by President Jonathan an imperative action for sustainable long term economic development of the country.”
She noted that the massive gas infrastructure development across the country is aimed at getting gas to industries, adding that Abuja and the Northern part of the country will be linked with gas pipelines for rapid industrialization by 2015.
She listed some of the completed and ongoing gas infrastructure projects to include Escravos-Oben Pipeline, expansion of Oben-Lagos Pipeline, Calabar-Ajaokuta and Ajaokuta-Kano Pipeline Systems among others.
Allison-Madueke, however, explained that the transformation into a gas nation is being harnessed with huge achievements in the crude oil sector where production has been sustained at an optimal level in spite of the crude oil theft and pipeline vandalism challenge.
She said, “In line with the national aspiration to grow crude oil reserves to 40 billion barrels and production to 4 million barrels per day, a total of 19 exploration wells were drilled comprising of 8 in the JV and 11 (3 Exploration and 8 Appraisal wells) under the PSC; 93 development wells were drilled comprising of 55 under JV and 38 under PSC; and 33 workover wells were also drilled consisting of 32 under JV and one in PSC in the period under review.
“Aggressive seismic and exploratory work is currently going on in the 9 inland basins with preliminary results indicating the presence of hydrocarbon in the Anambra and Chad Basins.”