Steadily Growing Crude Oil Production


Nigeria could ramp up crude oil production with peaceful Niger Delta

Last Tuesday, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, reiterated that through a series of dialogue and properly worked out resolution of the development challenges of the Niger Delta, Nigeria could maintain a steady growth in her oil and gas production. Chineme Okafor writes

In a renewed attempt to continue with the peaceful resolution of the Niger Delta development challenges and stem the tide of its derivative militancy and disruption of oil production in the region, the federal government, last week, convened a meeting of stakeholders in the region’s agitation for good governance and resource management.

Perhaps a continuation of what started in 2016, the meeting had the Minister of State for Petroleum Resources, Ibe Kachikwu, and other key government officials involved in the enlarged dialogue, which Kachikwu started to get the Niger Delta militants stop their troubles and come to the table with the government on their issues.

Like he stated in 2016, when he had several meetings with Niger Delta stakeholders, Kachikwu repeated at the resumed meeting that Nigeria could produce up to three million barrels of crude oil per day from the Niger Delta region.

He, however, explained that the insecurity in the region had been undermining Nigeria’s capacity to realise its potential in oil production, thus indicating that a holistic peace in the Niger Delta could be an effective means to improved oil production and revenue generation for Nigeria.

According to Kachikwu at the meeting: “It is important we continue to sustain the institutional engagement and negotiations which are key to the development of the region.”

“Our target is zero militancy by the middle of 2017, and an incident reduction in the region by 90 per cent by 2018.

“We must resolve current militancy problems and bring back oil production to 2.2 million barrels per day,” he added.

The minister, though claimed that over $40 billion had been spent in 12 years to develop the Niger Delta without credible infrastructure to justify such huge expenditure, stated that a lot of development in the region could have been achieved if there were real commitment to its challenges by its stakeholders.

A Peaceful Niger Delta

Urging stakeholders to commence immediate action in this regard, Kachikwu said there was need for stakeholders to create stability incentive schemes, jobs and investment opportunities, to strengthen the region against the attractions of militancy.

He said to push this further, government would introduce a joint account with oil companies to foster transparency in cash calls and ensure that revenue inflows were clearly understood by all. He also explained a collaborative development reserves for the region would be initiated.

“We are targeting 30 per cent cost savings, which we can link to transparency. What is most important is not the amount of the fund; it is the conceptualisation of that funding.

“Governors will have to come together as a regional block to look at cross-state investments in roads, railways, town facilities or specialist hospitals.

“We are going to pool in energy and ensure we look at cross border investments to strengthen the region,” Kachikwu stated.

Notwithstanding, the minister’s declarations at the meeting were part of the suggestions he offered in 2016 to the government and militants in the Niger Delta when the activities of the latter pushed Nigeria’s oil production to about 1.1 million barrels per day, and affected revenue generation for the country.

Kachikwu at that time said it was necessary for all parties involved to separate genuine agitation for good governance and resources management from criminality, which he said was denying Nigeria the benefits she should derive from stable oil production from the region.

But in reaction to the development, the government then opted for a military action against the militants, one, which Kachikwu felt was excessive and incapable of yielding the right results. He, thus emphasised then that a peaceful Niger Delta was downrightly needed to grow and stabilise Nigeria’s oil production.

During one of his 2016 meetings with stakeholders in the Niger Delta, Kachikwu said: “The Niger Delta is not an easy terrain to deal with, both in physiography and in terms of its politics. Obviously, what is happening over the last one year has been turbulent for the country, its resources and even the sustenance of the oil industry.

“What we did in terms of that meeting was to be able to bring them (stakeholders) to see the president so you can remove the level of trust deficit that had existed. The president is committed to finding solutions to these problems; but he is committed to finding lasting solutions, not one-offs that would come to haunt us again afterwards. That is why he is taking his time to understand how these people operate.”

“As we are doing that, we are also embarking on a series of actions, like actions related to the university; actions related to business opportunities in the area; actions related to clean-up operations. We are continuing to do this, while we are putting together the faces to have some negotiations and some conversations.

“Even at that, on a quarterly basis, the Ministry of Petroleum Resources is going to be on a roadshow, having Niger Delta stakeholders, opinion leaders meet with the governors, with ourselves and the oil companies to continue to deepen resolutions to some of the issues that you see,” he added.

On the impacts of a troubled Niger Delta on Nigeria’s oil production, he stated then that, “Counter accusations have never solved the problems. The reality about the Niger Delta is that no matter what you do, you never forget your base or you will be planning in vain and so we need to reach out to that base. We set a zero militancy target in 2017 and we want anything that needs to be done should be done.”

An oil industry expert, who spoke with THISDAY but craved anonymity, underlined the importance of keeping the Niger Delta peaceful. He stated that Nigeria’s realisation of its 2.2 million barrels per day oil production budgetary benchmark was hinged on a peaceful Delta and minimal or zero militancy.

He thus urged the government to improve its on-going dialogue with the region’s stakeholders straight away to avoid the risk of being held to ransom by its delays and alleged tactlessness.