Offshore Technology Conference (OTC) is an oil and gas industry foremost event that could be likened to the Olympics where professionals in the industry and stakeholders across the globe converge to brainstorm for the development of hydrocarbon resources. It covers all aspects of the energy industry and could be described as the best event where technical expertise is acquired. This year’s event which is the 14

th edition of the OTC held in Houston’s Reliant Centre, Texas from 6th -9th May. Below are some remarkable comments on Nigeria’s Oil and Gas industry at the 2013 event:

Nigeria Petroleum Minister Gave The Keynote Address

The Minister of Petroleum Resources, Mrs Diezani Alison-Madueke represented by the Group Managing Director of Nigeria National Petroleum Corporation (NNPC), Andrew Yakubu, in her address accused international traders of being partly responsible for the increasing spate of crude theft in Nigeria as they have developed a high appetite for stolen crude from the country.

In the address, which had the theme, “Development Efforts In West Africa Exploration Zone,” Alison-Madueke urged the international traders to cut down their high appetite for stolen crude from Nigeria and join in the fight against the activities of oil thieves and pipeline hackers.

She said for the country to achieve its obligations in the global supply mix, it was paramount for the international communities to stop buying crude oil from Nigeria.

Her words: “It takes two to tango. If those stealing Nigeria’s crude do not find a ready market for it, there would be no incentive to steal. That  is why we are appealing to the international community to take action.

“Trading the country’s crude by DNA to the destination is being looked into, to ensure that the fingerprints of our crude are traceable to various destinations. I can tell you that as an industry we are happy to work with governments in this regard.

Describing the sub-region as the most important petroleum province in the world, she said the natural advantages of the region’s open and unrestricted sea lanes and light sweet crude make it one of the most important province in the world. The Petroleum Minister noted that as the dominant player in the sub-region, Nigeria has pioneered some set of initiatives targeted at ensuring positive impact on the economy.

These initiatives, she listed include growth in crude oil reserves and expansion in production capacity, repositioning of gas for re-industrialisation/stimulation of the economy, regional and export penetration, revitalisation of existing downstream capacities and additional capacity to support energy and reforms of key institution to anchor the growth aspiration of the industry.

On the PIB, she said the bill is further designed to increase exploration and development activities in the region by creating more competitive environment for all players in the industry pointing out this will attract investment into the sector. She noted further that West Africa will continue to play a significant role, post-shale and gas discoveries in the global oil and gas energy supply mix.

Nigeria has sufficient Gas For Power Supply.

Nigeria’s inability to transmit and distribute electricity power have been said to the cause of the erratic power supply witnessed in the country and not lack of gas.

The Group Executive Director, Gas and Power, NNPC, Dr David Ige who made the disclosure said the generation of power was not a lone thing, but involves generation, transmission and distribution noting that over the years gas production has increased significantly.

Ige noted that “Infact, at the moment, domestic gas production in Nigeria is at all time high. We are now producing about 1.5billion cubic feet per day of gas which is the highest ever the country has produced. Apart from this, we have another 300million that are available in the East that is not utilised now. So, our gas development is actually on the increase and it is the most aggressive rate. We have grown about 200 per cent year-on-year.”

He said the failure to evacuate the gas that has been produced was the reason for the epileptic electricity supply in the country. The Gas and Power Director explained that as supply continually competes with demand, stakeholders are also taking steps to increase gas generation to meet the anticipated increase in transmission and distribution of power.

According to him, “The generation capacity is growing everyday because stakeholders are bringing in new turbines everyday. However, I can say for sure that our current gas availability is not enough for all the generating capacity that is being built and we recognise that. At any point in time, demand is going to be ahead of supply, because demand is pulling supply. Right now, the inability of Nigeria to have stable power supply is not as a result of unavailability of gas but the distribution challenges we are still grasping with. Generation is far ahead of distribution  and transmission.”

He disclosed that there was plan to bring additional 130million cubic feet per day with the aim to achieve 2billion cubic feet per day over the next two years.

He stressed further that the country has the capability to generate, transmit, and distribute 4.5gigawatts of electricity of all the supply chains were put in order.

Shell To Continue Force Majeure Declaration

Shell Petroleum Development Company (SPDC), has said the increasing declaration if force majeure by the company may continue until it recovers substantially from the attacks on its facilities.

The Managing Director and Country Chair of Shell, Mutiu Sunmonu who made the assertion told newsmen that there were some steps that need to be taken together, despite all the efforts being put by security agencies, to ensure that vandalism does not continue.

According to Sunmonu “The force majeure you have seen us declare is for us to remove some of the very bad bunkering points because if you don’t remove those bunkering points even if you have entire Nigerian Army in the creek, you will still continue to see crude being stolen. So our initial attempt is to remove those bunkering points to complement what the security agencies are doing.”

He explained that there has been a recent upsurge crude theft Nembe Creek Truck Line (NCTL), which resulted to frequent production shutdown and massive spills in the communities.

Between February 22 and 25, he noted, 12 flow stations were shut by safety systems three times because of crude theft and about 80,000 barrels of crude were lost to oil theft, he explained further.

He however, said the level of crude theft in the Niger Delta was decreasing and attributed it to the commitment of security agents.

His words: “If you have been following my statements in the media, certainly oil theft was on the increase a few months ago, but I can also tell you that I have also seen increase attention by the government security agencies, the Joint Task Force (JTF) and the Navy. They are really moving in to stem the tide. I wouldn’t say I’m happy but at least I can see improvement in responsiveness of government security agencies to the menace. I think the joint security team is getting more effective. We are having almost a daily discussion with them and they do give us good report on their efforts so far.”

He was quick to add that he was not expecting overnight solution, but the security agencies should keep at what they were doing as if done for a while there would be significant reduction.

Explaining further he said: “Unless you are in the creek you may not be able to appreciate what the government’s security agencies are doing, because of there is hardly any day that they are not foiling attempts, arresting vessels and destroying illegal refineries.

“For instance, in a place such as Bodo in a week or two weeks ago, they foiled over 30 different attempts by crude oil thieves wanting additional tapping points to our line.”

He added that the company cannot be certain on the figure of how much oil it was currently losing to oil theft since NCTL was down, but when it is up, it will be able to be certain on the number of barrels reduction in stolen crude.

First Bank Committed To Indigenous Coys

First Bank Plc says out of its N1.5 trillion loans and advances, well over 45 per cent was used to finance oil and gas projects in the country.

The bank’s Executive Director, Kehinde Lawanson highlighting financial institutions’ commitment to building local capacity and to the energy sector, said 45 per cent of loans and advances components of the bank’s balance sheet went to the upstream, midstream and downstream of the petroleum industry.

Lawanson added that the bank also financed 40 per cent of petroleum import into the country noting that since 1958, the bank has been financing projects for international and Nigerian oil companies.

According to him, First Bank was a lender and arranger of hybrid loans in excess of $100million 128KM gas pipeline to Unicem Cement Plant in Calabar, Cross River handled by East Horizon Gas Company; Co-lender 0f $289million to Atlantic Energy for working capital and payment for 55 per cent interests of National Petroleum Development Company; in OMLs 26, 30,34,42; sole financier of the $15.15million facility for acquisition of two vessels by Fymak Marine and Oil Services Nigeria, and provided part of the bridge loan financing for the acquisition of ConocoPhillips’ divested interest in OMLs 60,61,62 and 63.