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‘What engineers must do to fix oil and gas sector’

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The Group Managing Director, Niger Delta Exploration and Production PLC, Mr. Adegbite Falade has highlighted what the Nigerian Academy of Engineering must do to fix the problems in the Nigeria oil and gas sector.

Falade who was the guest speaker at the 2022 Nigerian Academy of Engineering Dinner Lecture in Lagos spoke on “Ownership Changes in Nigeria’s Oil and Gas Assets: Trends, Implications and Outlook.”
Dignitaries at the event included the President of the Nigerian Academy of Engineering, Prof. Azikwe Peter Onwualu, Group Chairman/ CEO of International Energy Services Limited, Dr Diran Fawibe and the immediate past president of the academy, Engr. Alex Ogedegbe.  
According to Falade, Nigeria has to fix the issues that are limiting current production in the industry, especially from the onshore base axis. “And very core to that is fixing the transport infrastructure that evacuates our production to the point of sale…” 
He said that the Nigerian Academy of Engineering needs to be at the forefront of advocacy for this.

“While ensuring that there is demonstrable technical and operational capacity in the would-be operator, the technology charge for the domestication of the consumption of our hydrocarbon resources must be a key agenda to the academy,” he said.
According to him, the academy should champion the deployment of technical solutions for the purpose of surveillance and security in the industry. “Current security efforts that are heavily reliant on human presence and intervention are outdated and grossly insufficient. Our industry is powered by technical professionals at the moment. We are facing a serious brain drain and there is a massive dearth of talents needed for the industry.”  

He said that the academy must put the regulators on their toes, especially as it relates to safety, professionalism and prudent operation. “Basically we need to be at our creative best to fashion out and catalyse the right solutions,” he noted. 

He disclosed that the Niger Delta remained one of the most prolific in terms of resource endowment. He said that the fact that the region has witnessed stagnated reserve and declining production is due to very poorly maintained critical infrastructure, especially those related to evacuating oil products to the point of sales.

“Further to the poor maintenance culture by the current operators of this infrastructure is the rising level of vandalisation that has given rise to unprecedented losses via theft, and growing insecurity among others.

“We have very little and insufficient government presence in host community areas. There is weak penetration of socio-economic development in these communities. This has created an incentive for individuals to target the product in the pipeline and many instances to mount stiff resistance to the uninterrupted operation of the international oil companies who are the major and dominant operators accounting for the bulk of our national production. Four, we have a high cost of operations in our operation in Nigeria.”

He disclosed that Niger Delta Exploration and Production Plc over the last 17 years have extracted in excess of 20 million barrels from the field that was deemed to own up to 5 to 10 million barrels. 

“It is a company that is 100 per cent Nigerians, with no single expatriate and has run a very sustainable operation adhering to best practices globally. Today, from the same location where we have extracted 20 million barrels, we are still capable of doing more than double what we have done.”
He added that the company further went into investment downstream or upstream and built a gas processing plant that today processes gas and sells it on the back of long-term off-taker agreements both to the export market and the domestic market.

“ And we have done that sustainably now for 10 years. Not only have we done that, we then went to invest in the refinery that started off about 10 to 12 years ago,” he said.