Tag: Oil Companies

  • Senate orders oil companies relocate to host communities

    The Senate is set to facilitate the relocation of oil and gas companies in Nigeria to their various operational bases in host communities to ensure smooth operations.

    The upper chamber said it has mandated its committees on Petroleum Resources Upstream, Downstream Petroleum Sector and Gas to liaise with the Ministry of Petroleum Resources and the Presidential Implementation Committee on the Petroleum Industry Act (PIA), to work on the relocation.

    The Senate reached the resolution after it considered a motion on the “Urgent need to encourage all Multinational and Nigerian Oil and Gas Companies to relocate to their Operational Bases.”

    The motion was sponsored by Senator Albert Bassey Akpan (PDP, Akwa Ibom North East) and co-sponsored by 23 other Senators.

    Bassey in his motion said, “The senate note with concern that multinational and Nigeria oil and gas companies have over the years been operating from their respective operational bases until militancy and insecurity in the host communities in the Niger delta became the order of the day;

    “Also notes that the reason proffered by the oil and gas companies for not relocating to their host communities has always been due to insecurity and hostilities in the host communities;

    “Aware that operating outside the host communities and operational base is the reason for the high cost of production which has been the bane of the country’s oil and gas industry, militating against maximum revenue from crude oil and gas sales to the federation account;

    “Recalls that this high cost of production has been one of the most contentious elements of our industry value chain;

    “Convinced that the recent passage and signing into law of the Petroleum Industry Act, 2021(PIA) by the National Assembly and the President of the Federal Republic of Nigeria respectively, is a major milestone towards the restoration of a lasting peace in the host communities;

    “Further convinced that the Petroleum Industry Act, 2021, now place certain responsibilities on the security, peace and safety of oil and gas infrastructure on the host communities to safeguard and ensure peaceful coexistence between oil and gas companies and their host communities;

    “Further convinced that is an opportunity to restore, recover and rehabilitate the massive and huge infrastructural facilities abandoned by the various oil and gas companies in their various operational bases to ensure their full utilization; and

    “Assured that the relocation of these companies to their host communities will further boost development in those areas and enhance the corporate social relationships and strengthen out collective resolve to considerably reduce the contentious cost of production and ensure adequate returns to federation account.”

    Accordingly, the Senate mandated its committees on Petroleum Resources Upstream, Downstream Petroleum Sector and Gas to liaise with the Ministry of Petroleum Resources and the Presidential Implementation Committee on the Petroleum Industry Act (PIA), to facilitate the relocation of oil and gas companies in Nigeria to their various operational bases to ensure smooth operations.

    Contributing, Senator Biobarakuma Degi-Eremienyo (Bayelsa East) said the agitations and problems within the oil and gas producing communities was as a result of their inability to easily access the management of the multinational companies to table complaints.

    “I believe that if this motion is passed and implemented, it will go a long way to assuage the yearnings and apprehension of the people within these host communities.

    “Mr. President, as a matter of fact, the cause of this situation is that the government of these areas are not even benefitting from the revenue, that is payment of tax, within the localities that they are exploiting this oil and gas, because the workers will claim that they are not resident in these areas.

    “The payee is not accruable to the state government. These are some of the things the people suffer on account of locating the headquarters away from the source of the raw materials”, he said.

    The lawmaker stressed that the full benefits of the Petroleum Industry Act would not accrue to the Federal Government if effort isn’t made to have the multinational companies relocate to the host communities where oil and gas is produced.

  • More Oil Companies Will Exit Nigeria soon – DPR

    The Department of Petroleum Resources (DPR) has warned that a huge number of companies in the oil and gas sector will soon begin to leave Nigeria. 

    The Deputy Director and Head of Upstream Division at DPR, Mr Enorense Amadasu, said at a stakeholders’ workshop in Lagos on Thursday this will occur as a result of some oilfields reaching the end of their shelf lives due to lack or inadequate maintenance. He said in the next 10 years, most of these oil fields will become obselete, forcing operators to abandon them.

    Mr Amadasu expressed concerns over the low level of exploration in the nation’s oil and gas industry, saying only one exploration well was drilled from January to September this year.

    “There is a need for exploration and production companies to focus on exploration or things that will help to build additional reserves,” Mr Amadasu said at the meetin.

    “For most of them, in another 10 years, if they continue to produce at the rate they are producing, they are going to get to the end of life of those fields,” he added.

    According to him, the nation’s oil production has been sustained around two million barrels per day and 2.2 million barrels per day, pointing out that the technical allowable production stood at 2.7 million barrels per day in the first half of the year and 2.3 million barrels per day in the second half.

    Mr Amadasu said, “We have all been given a target by government to take production to three million barrels per day by 2020.

    “From the beginning of the first quarter to the end of the third quarter, we drilled only one exploration well.”

    He further disclosed that there were seven appraisal wells, 99 development wells and 195 re-entry/workover wells in the nine-month period from January to September.

    On his part, Mr Sarki Auwalu, the new Director of the DPR, said some had argued that the oil and gas reserves had almost dried up.

    He said, “We know this simply isn’t the case. The Nigerian sedimentary basins are still open for business and with about 37 billion barrels remaining and a lot of yet to be explored potential, we will still be producing oil for decades to come.

    “However, as the oil becomes more difficult and costlier to extract, new approaches are required to improve the economics of operating in the industry and regulating it efficiently.

    “As a regulator, we know that there is much we can do to support additional production and maximise the potential of the Nigerian resources, working in partnership with the industry.”

    Mr Auwalu stressed that there must be a deliberate reserve growth policy and financial incentives for operators to take on the challenges of tapping the increasingly hard-to-reach resources.