Ikpea: Operators Must Ensure Assets’ Integrity to Raise Nigeria’s Dwindling Oil Output

*Seeks quick-wins, key deliverables on new PIA

Emmanuel Addeh in Abuja

The Chairman and Chief Executive of Lee Engineering Construction Company,  Dr Leemon Ikpea, CON,  at the weekend stressed that to raise Nigeria’s dwindling oil and gas production, industry players must ensure the commercial and operational efficiency of their operations.
The renowned industrialist spoke at the 53rd Annual Conference of the Nigerian Society of Chemical Engineers (NSChE), which took place at the Petroleum Training Institute, Effurun, Delta State.

Ikpea, who was represented by a non-Executive Director at the Lee Group of companies, Osten Olorunsola, explained that operators could drastically improve overall efficiency of field operations by implementing robust asset integrity management programmes to ensure the structural integrity and safety of assets over their lifecycle.

In addition, the businessman called for the deployment of predictive maintenance techniques to reduce downtime, utilise remote and real-time monitoring for lifespan extensions as well as reservoir management.
The conference was themed: “Optimisation of Nigeria’s Oil and Gas Assets for Sustainable Energy Transition.”

Stressing that the world is going through significant geopolitical and geo-economic turbulence with climate and energy fuelling the crisis, Ikpea pointed out that Nigeria is neither excluded nor protected from the risks and crisis.
According to him, if anything, the country feels greater pains because of sharp decline in oil and gas production, which he described as the cornerstone of Nigeria’s economy.

He recalled that he had earlier posited during an engagement at the National Assembly that all the critical issues and headwinds Nigeria is facing, including cost of living, inflation, unemployment and insecurity would evaporate if the country can once again attain revenue resilience as it once did.

He highlighted that oil and gas is the only sector that is near ready to make that happen faster, noting that 10 years ago, the industry had aggregate daily oil production of well over 2.2 million barrels per day, while currently it is struggling to keep it steady at 1.2 million bpd.
“And we have seen, there is similar decline in gas production, both for domestic consumption as well as export. The combined effect is continuous gross shortage of revenues.

“Optimising oil and gas assets is a complex and ongoing process. It involves various strategies, technologies and actions to maximise production, recoverable reserves, minimise operating costs, ensure safety and compliance and ultimately sustainability.

“Above all, it requires collaboration between engineers, data scientists, and operational personnel to achieve the best results,” he added.
Listing governance and regulations as critical to achieving Nigeria’s oil sector goals, Ikpea explained that even though the Petroleum Industrial Act (PIA) is work in progress, Nigeria  must ensure that it delivers as intended.

 He maintained that some of the objectives of the PIA include: Good governance, attraction of investments, in-country value addition, harmony with host communities and accelerated value capture in view of the dynamics of energy transition.

“Sadly, after two years of implementation of the PIA, none of these deliverables is yet on the table. Government must immediately establish a well structured framework to govern and manage the implementation of the PIA for it to deliver as intended,” he noted.

On ease of doing business in the sector, he explained that there was the need to improve the overall working environment to ensure it is progressively enabling, result oriented and inclusive in all ramifications.
 Fundamentally, he pointed out that Nigeria must redouble efforts to reduce the menace of insecurity around oil and gas, being the cornerstone of the Nigerian economy.

Also speaking on the issue of climate change and energy transition, Ikpea said that it was no longer possible to ignore the impact of the changes that are going on.
“I am sure you have been following the global temperature trends to the extent that July this year has been rated the hottest ever recorded, largely attributed to atmospheric carbon dioxide emissions from fossil fuels. In fact, there are credible doubts if committed net zero promises and aspired global temperature can be achieved.

“According to Dr Antonio Guterres, the Secretary General of the United Nations, we no longer have global warming, rather the earth is truly boiling now. Uncommon and extreme weather conditions, flash floods, mudslides, wild fires etc are now quite frequent and with increasing intensities and levels of devastation all around the world.

“These conditions have triggered or aggravated serious crisis including environmental and socio-economic resilience.
“This is the reason for all the effort around energy transition which in my view can only be successful and sustainable if and only if climate security and energy security go hand in hand and under platforms of cooperation, collaboration, fairness, inclusion and equity,” he argued.

Since oil and gas will remain the cornerstone of Nigeria’s economy even for the foreseeable future, Ikpea maintained that there will be need to accelerate and maximise value capture to minimise the potential damage of dynamics of energy transition.
“The practical manifestation of this will be rapid growth in production. I believe Nigeria actually needs more oil to get out of oil. Proceeds from optimised oil and gas will readily cushion capital required to deliver climate actions as well as transition fundamentals,” he said.

Also speaking, the National President of the NSChE, Anthony Ogbuigwe,  said the organisation was embarking on an active promotion of research and development in renewable technologies such as solar, wind, and biomass with a view to reducing the nation’s reliance on fossil fuels.
“By diversifying our energy, we aim to reduce our reliance on fossil fuel,” he stated, noting that the society’s partnerships with relevant stakeholders were crucial in advancing sustainable energy solutions.