FG, independent oil producers commit to curbing crude theft, asset development

Though the Federal Government reiterates its commitment to curbing crude theft in the country while improving acreage, the Independent Petroleum Producers Group (IPPG) has decried rising huge crude oil theft from its assets, a situation it described as threatening its over $10b investments in the country.

Chairman of the Group, Abdulrasaq Isa, while speaking at an engagement meeting with the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, in Lagos, disclosed that aside from producing about 252,000 barrels of oil a day and 650 million standard cubic feet of gas daily, the group would be responsible for 100 per cent of 1.2 million barrels per day refining capacity in the near future.

According to Isa, indigenous players remain best placed to guarantee a steady flow, incremental investment in adding value to existing assets, having spent over $11b in asset acquisitions and $13b on capital expenditure.

Isa, who is also the Board Chairman at Waltersmith Petroman Oil Limited, disclosed that operators’ investments remain challenged by incidences of crude theft.

The Chairman said to address the trend, there is a need to enhance security for strategic installations and assets across the region, while a major offensive against crude oil thieves is reinvigorated.

In addition, he suggested the execution of a private sector-driven pipeline security initiative and deployment of surveillance technology, such as drone technology to identify Illegal crude theft points.

He also called for continuous engagement with regulators in the formulation of industry regulations and inclusion of IPPG members in the Petroleum Industry Act, PIA, Implementation Steering Committee and an all-inclusive approach in the effective and timely implementation of the PIA.

The Commission Chief Executive of the NUPRC, Gbenga Komolafe, acknowledged concerns about crude theft in the industry but assured that the government is taking serious steps to address them.

Komolafe said a strong security web would be weaved around oil facilities to curb the incidence, and that community engagement, as stipulated in the Act, would be rigorously pursued to achieve peace in host communities.

He appealed to producers to ensure timely payment of royalties as enshrined in the PIA, as it represents the first line of charge.

He said the government would continue to develop initiatives that would help create a clement environment for investment to thrive in the sector.

This is as stakeholders in IPPG and NUPRC assured that enactment of the Petroleum Industry Act 2021 would ensure that the focus and effective implementation of the PIAs are not eroded and that this would improve the fiscal terms for the competitive energy sector capable of adequately balancing government and investors’ returns.

The sector experts hinted that implementation of the PIA would depend on the significant expansion in the government’s capacity, technical and commercial regulatory role, saying the span of PIA implementation would take 12-18 months.

Isa explained that there’s a new culture in regulatory activities that would put in place effective regulations, such that it would drive the operating processes.

Speaking on the role of indigenous E & P Players, IPPG said the indigenous are committed to supplying gas to the domestic market to bridge the demand gap, and that members currently contribute about 50 per cent of the country’s domestic gas supply requirements and are committed to further growing this supply capacity.

On energy transition and domestic energy security, Isa noted that operators fully align with the government’s decade of gas initiative, as it seeks to utilise the nation’s abundant gas resources to power the economy and address underlying issues.

(The Guardian)