OTC: Nigeria reforming oil, gas industry
Nigeria will begin in June to implement its oil and gas industry reforms, which will enhance transparency and efficiency, a senior petroleum official said at the Offshore Technology Conference in Houston.
LONDON, May 12 -- Nigeria will begin in June to implement its oil and gas industry reforms, which will enhance transparency and efficiency, a senior petroleum official said at the Offshore Technology Conference in Houston.
Tony Chukwueke, head of Nigeria's Department for Petroleum Resources (DPR), said the government is reforming the sector because of conflicting roles by different agencies. The DPR will be replaced by the Petroleum Inspectorate Commission, which will regulate the industry. It will focus on upstream operations and implementing the policies of the National Petroleum Directorate, which will replace the Ministry of Petroleum Resources.
In its present form, Nigeria National Petroleum Corp. also regulates the oil sector, and changes in its structure would abolish this function so that it can focus solely on operations. Its new name will be National Oil Co. (NAPCON).The key change will be a switch from joint ventures to incorporated joint ventures where new companies with a separate board are established with its partners. This change would address funding problems, as NAPCON would be free to seek investment from the market.
Chukwueke said: "We want to make refining open to everyone so the Pipelines & Products Marketing Co. Ltd, (PPMC) will no longer have a monopoly on the market."
Gas monetization is a high priority, and the country's ambition is to realize gas revenues on par with the oil industry by 2010. Consequently, gas flaring will be eliminated, and companies would be dissuaded from flaring by paying the economic value of any gas flared, Chukwueke added.
Nigeria wants to increase its oil production capacity to 4 million b/d from 2.8 million b/d by 2010 and boost its petroleum revenue base to $40 billion/year from $25 billion/year by 2010.
"We have only started to scratch the surface of the deepwater," Chukwueke said.
He assured delegates that the government was working hard to resolve the crisis in the Niger Delta and had linked development programs to upstream undertakings.
A new bidding round will be launched later this year, or in early 2009, he added.
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