As the new Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Mele Kolo Kyari settles down to steer the ship of the state-owned oil company, the Petroleum Technology Association of Nigeria (PETAN), has tasked him to among other things, push for increased investment in oil exploration activities.
This, according to the association would catalyse Nigeria’s economic diversification dream.
The Chairman of PETAN, Mr. Bank-Anthony Okoroafor, gave the advice in an article, while pledging the association’s support for Mele Kyari.
According to Okoroafor, to achieve a 45 billion reserve, “we must carry out exploration and drill more wells. Nigeria has the lowest well services activity in the world. Most of the International Oil Companies (IOCs) are not exploring and drilling activity is minimal.”
He added: “Your good office with the Department of Petroleum Resources (DPR) and critical stakeholders must look into this to ensure the operating companies explore and drill more wells.
“NNPC also needs to intensify exploration in all the inland basins”.
According to him, “the shallow water and onshore contribute about 60 per cent of Nigeria production.”
He added that the Deepwater had contributed more than $100 billion to the government in the past 10 year, noting that potential exists for future investment above $70 billion if we can put the right things in place.”
He cautioned that Nigeria should “not use Deepwater to kill shallow water,” saying to address low exploration in Deepwater, Mele Kyari should use stick and carrot approach on companies that do not invest in exploration.
He added: “We are carrying reserve value of about 37 billion barrels and 174 tcf gas. I believe our reserve is about 200 billion barrels and 400 tcf gas.
“We must as a country invest in exploration now that oil is fast going out of fashion to derive the full value from our natural resources and use it quickly to diversify our economy and improve on our infrastructure.”
“Government needs to create incentives towards exploration for reserve replacement, urge development of allocated but un-developed blocks and
increase in production enhanced; with a total of two billion barrels produced from Nigeria’s Deepwater space since inception, the contribution to national production by Deepwater operations has consistently been on the rise since the NOGICD Act.”
The PETAN boss however, urged Mele Kyari to see to the timely conclusion of the ongoing industry reforms guaranteeing legislative certainty and clarity.
He pointed out that the petroleum reform bill was holding down lots of Final Investment Decisions (FIDs) and critical investment decisions.