Lukman: Nigeria oil sector striving to meet technological, economic goals

Nigeria's current open licensing round is merely an early step in the country's bid to advance its oil industry, both technologically and economically, says Rilwanu Lukman, special adviser to President Olusegun Obasanjo. In his address at a Nigerian Society of Petroleum Engineers conference, Lukman said, in order to increase indigenous participation in the petroleum industry, Nigerian engineers would encounter significant challenges, foremost among which is application of new technologies.


ABUJA�Nigeria's current open licensing round is merely an early step in the country's bid to advance its oil industry, both technologically and economically, says Rilwanu Lukman, special adviser on petroleum and energy to President Olusegun Obasanjo.

In his address at the 24th annual conference and exhibition of the Nigerian chapter of the Society of Petroleum Engineers, Lukman said that, in order to achieve the government's objective of increased indigenous participation in the Nigerian petroleum industry, Nigerian petroleum engineers would encounter significant challenges, foremost among which is the application of new technologies.

Lukman said critically that, after more than 45 years of oil exploration and production, Nigeria still depends largely on imported technology, services, and expatriate manpower. He also said he hoped the SPE would be able to offer strategies to help the Nigerian petroleum industry meet its technological objectives.

The petroleum sector accounts for some 80% of Nigeria's revenue and more than 90% of its foreign exchange earnings. But the government is making concerted efforts to reduce Nigeria's dependence on the petroleum sector by diversifying its resource base to include other revenue generation areas, Lukman noted.

"The petroleum sector will, however, still continue to play a leading role in the Nigerian economy...," he said.

Speaking on behalf of the president, Lukman noted that, in the current bid round, licenses were put on competitive, open offer in March "in pursuit of the enunciated policy of transparency and accountability�." He said the open bidding was also a precursor to periodic competitive licensing rounds in the country.

The results of the offering of 22 blocks in the Niger Delta, in and off Nigeria, will likely be announced before the end of the year, said Lukman (OGJ Online, July 10, 2000).

Future Nigerian challenges
Lukman challenged Nigerian petroleum engineers to develop industry-wide technical and management strategies for revisiting old oil fields to identify bypassed hydrocarbons and develop fields earlier classified as marginal. He said Nigerian petroleum engineers must also take up the country's challenge of increasing the reserve base from the current 25 billion bbl to 30 billion bbl by 2003 and the planned increase in production capacity from 2.2 million b/d to 3.0 million b/d.

Lukman said considerable ingenuity would be required to develop effective ways for harnessing the vast resources that exist in Nigeria's harsh, deep offshore frontiers. "The role of the Nigerian petroleum engineer is to develop cost-effective mechanisms for the development of these resources," he said.

Lukman defended progress made by the current government, saying it has focused its attention on the proper funding of the nation's petroleum industry. "Since inception, this administration has seen to it that all joint-venture cash obligations are being met and that previously accumulated backlogs of payments are gradually being offset."

Lukman noted that "new and innovative alternative funding mechanisms are being conceived to further allow for the sustainable development and growth of the industry. These alternative financing mechanisms will be applied to high-cost programs in frontier areas and difficult terrain, thus freeing a considerable proportion of government funds for investment in other sectors."

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