Abia Moves to Commence Oil and Gas Production, Sets Up SPV with PETAN

Emmanuel Ugwu-Nwogo in Umuahia

Abia State has decided to go full blast into the upstream petroleum sector in order to enhance its capacity as an oil and gas producing state and further grow its economy.

Oil and gas production in Abia’s Ukwa West Local Government, which was hitherto undertaken by the SPDC has been taken over by the Nigeria Petroleum Development Company (NPDC), a subsidiary of NNPCL, which operates the OML 11 at Owaza.

But the Abia Commissioner for Information, Prince Okey Kanu told journalists Tuesday, after a meeting of the State Executive Council, that the state intends to activate its uncapped oil wells.
The uncapped oils, estimated at 100 in number strand both Ukwa West and Ukwa East Local Governments, though production activities have been concentrated only at Owaza, Ukwa West.
To activate the capped oil wells, Kanu said that government has set up a special purpose vehicle(SPV) through which it would go into oil production thereby enhansing Abia’s status as an oil producing state.

He said that the SPV was set in partnership with the Petroleum Technology Association of Nigeria (PETAN) with Abia controlling 40 percent equity stake, PETAN 25 percent while 35 percent would be taken by other private investors.

“And when fully operational this would enable the state government to produce both gas and oil which of course would support the Abia Industrial and Innovation Park(AIIP) project,” Kanu said.

Kanu also stated that the Modular Refinery Project being constructed at the AIIP was very much on course, adding that “the company behind the project, HSI Engineering is committed to birthing (the modular refinery) before the end of this year.”

According to the Abia government spokesman, HSI Engineering has made significant process in keeping to the project  completion timeline.

“They have recorded some very impressive milestones that speaks to their intention to commence full refining business before the end of this year,” Kanu stated.

The Commissioner for Petroleum and Mineral Resources, Prof. Joel Ogbonna said that Abia was now ready for “real business: in the oil and gas sector by taking advantage of its rich oil resource to develop the state’s economy.

He pointed out that government has commenced compensation for the 1,933 hectares of land it acquired in Owaza, Ukwa West for the Abia State Industrial Innovation Park.

According to him,  it was based on Governor Otti’s “usual way of doing things (that) we needed to make sure we pay the compensation which may have delayed whatever we wanted to do”