SPE Seeks Diversification in Oil Sector for Increased Value

0

By Peter Uzoho

The Society of Petroleum Engineers (SPE) Nigeria, has emphasised the need for urgent diversification of the Nigerian oil and gas industry in order to maximise opportunities along the upstream, midstream and downstream value chains.

The Chairman of SPE Nigeria Council, Mr. Joe Nwakwue, made the call recently at a press conference ahead of the virtual Nigeria Energy Industry Transformation Summit (NEITS) holding from August 25 to 27, 2020.

He said over the years, Nigeria has been running an extractive industry in the name of oil and gas industry, pointing out that the inability to diversify the oil sector has deprived the country huge economic opportunities.

Nwakwue said: “You know the narrative all the while is that we need to diversify the economy. So for us who are in the oil and gas, we actually think that what Nigeria has failed to do is to diversify the oil and gas itself.

“So we haven’t for instance looked at developing the midstream industry. So if you think about the downstream, it is equally almost dying. So we think that that has resulted in a situation where Nigeria has an extractive industry.

“So we produce crude, we put in a boat, we sell it. So the value capture ends there.

We know that selling primary commodity does not maximise value capture. So, to be able to maximise value capture for the country you need to diversify the industry along the value chain.”

He further said: “Basically, you need to go from upstream to midstream to downstream. When you do that, you capture the value alongside. So we will have petrochemicals, we have gas utilisation, whether it is gas plant and all the things that depend on gas: fertiliser, still rolling mills, all of that will be fired.

“You create jobs, that’s what we have missed and that’s why we are where we are. If we had diversified the oil industry itself, our story would be significantly different, I can tell you that.”

The SPE Nigeria Council chair also advised the federal government to step up in the area of allocating profitable oil assets to investors, saying, giving assets that could be developed profitably would attract more companies in the upstream business and increase the nation’s output.

Meanwhile, the maiden edition of SPE Nigeria Energy Industry Transformative Summit (NEITS) has been slated to hold virtually from August 25 (Tuesday) to 27, 2020.

The summit, with the theme: “Changing Global Energy Landscape: Strategies for Industry Sustainability,” will be attended by the duo of the Minister of State for Petroleum, Chief Timipre Sylva; and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Mele Kyari, alongside many industry stakeholders home and abroad.