DPR sanctions 50m barrels of crude oil in first quarter 2018

As part of federal government’s efforts at boosting crude oil production, the Department of Petroleum Resources (DPR) in the first quarter of this year approved about 50 million barrels of crude oil production from various fields across the Niger Delta region.

When this is translated into monetary value with average price of $70 a barrel, it comes to about $3.5 billion. The government stake in this would by about 60 per cent based on its equity share in the assets if the whole volume is sold. However, currently, Nigeria produces an average of 2.15 million barrels a day including condensate. This is an improvement on the previous year when not much success was recorded.

Also, about 80 acreages are currently under review and it is expected that the exercise would soon be concluded so that more crude oil can be produced for the benefit of the country. Also, a total of 21 rigs were operational during the period under review. This is just as some of the companies have had the field development programme sanctioned by the DPR.

Federal Government recently revealed plans to shore up oil revenue resources by increasing annual oil reserve to 1 billion barrels.

Ibeh Kachikwu, the minister of state for Petroleum Resources, while speaking at the Nigerian Content Seminar, said the federal government was determined to increase production, stabilise the economy, while also taking advantage of stability offered by the Organisation of Oil Producing countries (OPEC).

In order to help the course of boosting oil production, the Nigerian Content Development and Monitoring Board (NCDMB) and the Oil Producers Trade Section (OPTS), the umbrella body of major international and indigenous operating oil companies signed a Service Level Agreement (SLA) aimed at shortening the often protracted industry contracting cycle. With this they would no longer be delay in execution of projects.

The SLA commits the 28-member OPTS companies to comply with the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, essentially to submit to the NCDMB documents like their Quarterly Job Forecasts, Nigerian Content Plans, Bidders Lists, Nigerian Content Evaluation Criteria, Nigerian Content Technical Bids among other relevant information in relation to industry contracting and procurement cycles.

On the other hand, the Board pledged to respond on specific timelines and committed that should it fail to meet the set deadlines, the companies can proceed with their tendering processes after duly informing the Board.

Simbi Wabote, the executive secretary NCDMB, signed on behalf of the Board, while Paul McGrath the Managing Director of ExxonMobil Nigeria, signed on behalf of the OPTS.

The SLA with the OPTS is sequel to the one entered between the Board and the Nigerian Liquefied Natural Gas Company (NLNG) in May 2017, which was the first between a regulator and another entity in the Nigerian oil and gas industry.

The executive secretary explained that the SLA with the OPTS was in furtherance of the Board’s efforts to meet the target set by the Minister of State for Petroleum Resources, Emmanuel Ibe Kachikwu, for the industry contracting cycle to be shortened to six months. This initiative is also in line with the Presidential Executive Order 001, which promotes Ease of Doing Business in Nigeria.

Initiatives by the NCDMB had helped to cut the cycle significantly to 14 months from 24-36 months which had obtained in the past.

Wabote stressed that operations of the oil and gas industry were time sensitive adding that a shortened contracting cycle would cut the cost of projects considerably.

He noted that the SLA signed with the NLNG had improved the turn-around time of approvals between the two establishments, informing that the Board was working to sign a similar agreement with the Indigenous Petroleum Producers Group (IPPG).

In his comments, the Managing Director of ExxonMobil thanked the Executive Secretary for the wonderful initiatives he had introduced since assuming office a year and half ago. He stated that the OPTS members contributed in the development of the SLA and they will ensure compliance.