FG Blames Waning Investment, Insecurity for Declining Crude Oil Production

Emmanuel Addeh in Abuja

The federal government yesterday said that absence of long-term investment in the oil and gas sector as well as insecurity should be blamed for Nigeria’s current low crude oil production.

A statement by the Senior Adviser, Media and Communications, Horatius Egua, quoted the Minister of State, Petroleum Resources, Timipre Sylva, as having made the comment while speaking at a ministerial plenary, at the ongoing Ceraweek, in Houston, Texas.

Specifically, Sylva stated that this development was responsible for the inability of Nigeria to meet the Organisation of the Petroleum Exporting Countries (OPEC) quota in recent times.

Although Nigeria’s OPEC production quota is pegged at 1.8 million bpd, but in the last few years, the country has struggled between 1.3 and 1.4 million bpd.

Sylva insisted that the speed with which International Oil Companies (IOCs) and other investors were withdrawing investments in hydrocarbon exploitation had further contributed significantly to Nigeria’s underperformance.

“The rate at which investments was taken away was too fast. Lack of investment in the oil and gas sector contributed to Nigeria’s inability to meet OPEC quota. We are not able to get the needed investments to develop the sector and that affected us,” he stated.

He also cited security challenges as another major factor that contributed to the lack of significant growth of the sector in the country and added that the drive towards renewable energy by climate enthusiasts had discouraged funding for the sector.

Sylva, however called for a change of attitude, stressing that in decades to come hydrocarbon will continue to play a central role in meeting the energy needs of the world.

The minister  said that although Nigeria was in full support of the energy transition, however the country and the African continent should be allowed to develop at its own pace to be able to meet the energy needs of the over 600 million people who have no access to any form of power in Africa.

He added: “There are about 600 million people in Africa without access to power and of that number the majority live in Nigeria. And of the over 900 million people without access to power in the world, the majority live in Africa.

“So how do we provide access to power for these people if you say we should not produce gas? We believe that gas is the way to go.

“We believe that gas is the way forward and the one access to power.  For the energy transition programme to be taken seriously we need to have an inclusive energy transition programme,” he argued.

According to him, while Africa believes in the energy transition, it has its  peculiar problems.

“We are saying that our energy transition should be focused on gas to bridge the energy gap. This is what we have been saying. We need a just and equitable energy transition programme,” Sylva further stated.

He maintained that Nigeria was also not in any way against the energy transition programme, but urged promoters of renewable energy as the only path to energy transition to give the poorer countries of the world the opportunity to achieve energy sufficiency before doing away with fossil fuel.

“As Africans we are saying that we must be allowed to transit through gas. We cannot achieve one energy base load through renewable alone. The rest of the world must listen to us. We are happy that our point of view is being taken,” he stressed.