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Nigeria becoming laughingstock of oil-producing countries – Sylva

…Cautions oil firms against assets disposal

The Minister of State for Petroleum Resources, Chief Timipre Sylva, Tuesday, disclosed that Nigeria has become the laughingstock among oil-producing countries due to its high cost of crude oil production.

Timipre Sylva
Minister of State for Petroleum, Timipre Sylva

Speaking during a visit of officials from Total Exploration and Production Nigeria to his office in Abuja, Sylva noted that this was because the cost of producing a barrel of crude oil in Nigeria was too high and was unsustainable.

He also bemoaned the fact that Nigeria’s crude oil reserves had remained stagnant for over a decade, while crude oil output had hovered around two million barrels for several years now.

Sylva explained that these was part of his four focal areas in the petroleum ministry, noting that in addition to these areas, he planned to meet with the Nigerian National Petroleum Corporation, NNPC and the National Assembly to draw up a clear timeline for the passage of the different variants of the Petroleum Industry Bill, PIB

“We have to bring down our cost of production of crude oil, as we are presently a laughingstock in the way we do our business, because our cost per barrel is unsustainable. I do not see how we can sustain the losses,” he maintained.

He identified the focal areas of his administration in the petroleum ministry to include ensuring zero loss of crude oil output; bringing down the cost of crude oil and gas production; conduct of oil and gas bid rounds; and gas development.

Sylva also cautioned international oil companies operating in Nigeria on their relinquishment policies, warning them against wanton sale of assets without recourse to the Federal Government.

“I am confident that Total E&P is not among those companies in the practice of selling off of their assets. Those assets, the IOCs should know, are amortized assets; you cannot sell what you do not have.”

He promised to partner with Total and other stakeholders to create an enabling environment in the petroleum industry that would encourage investments in the industry and engender renewed exploration

The Honourable Minister further stated that by now, he expected the country to be producing no less than four million barrels of crude oil per day, but decried the situation where we are still hovering between 2.0 million and 2.2 million.

Sylva said he was looking at the future of oil and declared that his realization is that “The quicker we produce our oil, the better for us. The Industry has to grow.  We need to look at exploration. Our reserves are growing far less than expected.”

To be able to set at what he wants to achieve for the oil and gas industry, Sylva declared the necessity of getting the Petroleum Industry Governance Bill, PIGB, revisited by the National Assembly.

“We need to tidy up the regulatory environment with the National Assembly.  I have called the Group Managing Director of the NNPC for us to meet with the National Assembly and have a timeline which we can announce to the world.  We also need to harmonize the laws so that we don’t have too many, with which we can regulate the industry,” he said.

SOURCE: vanguard