Stakeholders Urged to Maximise Oil and Gas Potentials
By Mike Oduniyi
The presidential Adviser on Petroleum and Energy Dr Edmund Daukoru has called on Stakeholders in the oil and gas sector to collaborate to take full advantage of the potentials that abound in the sector.
Daukoru who spoke at the SPE 28th annual international conference in Abuja recently explained that all the advantages of human capital availability, technological edge and abundabt natural resources may not be forever open to the industry and so they must be maximally utilised now that they abound.
"We find ourselves in a new world in which we must become both architect and master of our own destiny. All of the prescribed ingredients are in place - an educated and productive workforce, a vast endowment of natural resources. and most important of all, a global alignment of favourable market, economic and social factors. This window of opportunity may not stay open for too long," he said.
According to him,he stated that the tide of globalisation, driven to full flood by technological developments related to transportation, telecommunication and computing, has been accompanied by greater demands for transparency, openness, trade liberalisation and competition. For the Oil and Gas sector to realise the full benefits of globalisation therefore, Government, Industry and civil society must stand together in partnership. "The successes recorded thus far by our joint venture partnerships with International Oil Companies have demonstrated the real value, which can be gained from public and private sector entities working together" he added.
Speaking further at the event, Daukoru disclosed that "a little shaky, however, has been the third leg of this partnership; community relations in the producing states, a situation that Mr. President is addressing on all fronts. We must now take the next steps necessary to sustain the industry well into the 21st century" he stressed.
Your choice of Transition from Oil to Oil and Gas based Economy as the theme of this year's conference comes at an important time for our industry, and is most appropriate as it underscores the key role that gas is set to play in meeting indeed our industry are positioned to play as a result. The World Bank estimates that global energy consumption will double by 2050, and that the demand for gas would outstrip oil as early as 2025. World economic growth, changing energy markets, and advances in technology have combined to transform gas into a cost competitive and flexible global energy option at a pace few thought possible until recent years. In addition, gas offers significant environmental advantages over oil and coal, and as such, has become the preferred fuel in the power sector. Both the US and Europe are increasing their dependence on imported gas as their own domestic production declines. The US has become a net gas importer - projected to import 12% of its gas supply by 2020 and approximately half of Europe's total gas supplies will come from imports in 2010, and 65% in 2020.
4. These riveting statistics speak to the tremendous gain our nation stands to derive from the well- organised and virile pursuit of a Gas industry, attainable not just from the strategic geographic location of our country relative to the markets of the Atlantic Basin, but also from the abundance of low-cost gas reserves. It has been said that the Niger Delta is a gas province associated with oil, not the other way around. There must be truth in this statement because without actively searching for, and even with widespread discrimination against gas in many cases, the country has realised a proven gas reserve base of over 187 tcf in the Niger Delta. Indeed in the opinion of many operators, this figure could be twice or thrice as much. There is every indication therefore that Gas could overtake Oil in economic potential to the nation well within the practising lives of many within this audience. This impending reality demands, therefore, that we take fundamental steps now to ensure that the nation s Gas business is built upon a sustainable economic and commercial platform, well structured to meet the aspirations of government and other stakeholders.
5. Mr. President has outlined a clear long-term vision for Gas; that the nation generates as much revenue from gas as from oil by the year 2010. The challenges that underscore this exciting vision for the Oil and Gas industry are many. First of the priorities is to stop the flaring of associated gas aimed at two strategic goals;
(1) Elimination of a waste of a precious natural resource and compliance with the Kyoto Protocol on Global Warming, which looks almost certain to become mandatory considering the latest noises from Russia and the persistence of the EU - a major trading block for Nigeria.
(2) To seize the opportunities offered by our proximity to the Atlantic Basin markets and its growing gas demand.
Second of our priorities should be to embark on a dedicated exploration and development of non- associated gas in a systematic manner based on full cycle economics to meet the demands of a growing world market.
6. The next of the challenges is funding. Gas projects, you will recall are capital intensive and part of a long and complex value chain. The Nigeria LNG was a first attempt at major gas monetisation after the flare penalties of the seventies and eighties proved negative and ineffective.
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