As Nigeria and the rest of the world face depleting oil revenues, the federal government is leading innovative means to cut oil production cost, enhance gas production and promote industry safety with the National Oil and Gas Excellence Centre (NOGEC).
The centre, built by the Department of Petroleum Resources (DPR), was recently commissioned by President Muhammadu Buhari in Lagos.
The inauguration of the NOGEC came at a time Nigeria and the rest of the world are raising concerns over depleting oil revenue and the breakthrough in alternative forms of energy, including renewable and solar energy.
To underscore the damage done to the Nigerian economy which is heavily reliant on oil, Nigeria’s Finance Minister, Mrs Zainab Ahmed, in May 2020, announced that the national revenue target fell by N125.52 billion in the first quarter of 2020 to N940.91bn.
The Group Managing Director of NNPC, Mallam Mele Kyari, hinted at this paradigm shift when in December 2020, at the Central Bank of Nigeria (CBN) roundtable session, he said NNPC was putting measures in place to reduce the cost of crude oil production to create market for the country’s crude.
He said the move was also aimed at making the country a choice destination for Foreign Direct Investments (FDIs).
“The current cost of crude oil production in the country is within the range of $15 to $17 per barrel, while Saudi Arabia has a cost of production that is between $4 and $5 per barrel,” Kyari said.
To this end, industry experts reacted positively after President Buhari commissioned the NOGEC which is operating under the supervision of the DPR.
Buhari, who was represented at the event by the Minister of State for Petroleum Resources, Timipre Sylva, said: “This National Oil and Gas Excellence Centre will serve as an integrated resource complex to drive safety, value and cost efficiency in the industry. It is, therefore, another milestone in the development of the oil and gas sector and the realization of greater value for the country.”
Centre opens new opportunities
The president also noted that the Centre has opened a new set of opportunities for the Nigerian Petroleum Industry in terms of investments.
He said NOGEC aligned with his administration’s commitment to promote the development engendered in the National Petroleum Policy 2017, the National Gas Policy 2017, the Economic Recovery and Growth Plan (ERGP) and the Economic Sustainability Plan (ESP) 2020.
While inaugurating the centre, Buhari said NOGEC will support the achievement of the ministerial priorities which include cost reduction, increase in production, and value maximization in the oil and gas industry.
The centre is under the direct supervision of DPR and will leverage on the existing capacity of the National Data Repository (NDR) to drive initiatives that will enhance safety, value and cost efficiency in the industry.
“The establishment of NOGEC is not only a response to a safer, cost-efficient and sustainable oil and gas industry but also a strategic move to position Nigeria as regional and global leader in cost efficiency, breakthrough solutions and value-added services for the industry.”
NOGEC complex encompasses five units
The integrated NOGEC complex encompasses five units which are the Search, Rescue and Surveillance (SeRAS) Command and Control Centre, the National Improved Oil Recovery Centre (NIORC), the Oil and Gas Alternative Dispute Resolution Centre (ADRC), the Oil and Gas Competence Development Centre (CDC) and the Integrated Data Mining and Analytics Centre (IDMAC).
SeRAS is designed to enhance safety management, emergency preparedness and response and routine transportation for bed space management.
NIORC promotes the implementation of improved and enhanced oil recovery technologies/methods to arrest the incidences of production decline and resultant high cost in many assets, especially in the matured Niger Delta Basin.
The ADRC is the mediation arm to arrest the prevalent value erosion attributable to sub-optimal development or non-development of oil and gas assets due to lingering disputes.
The IDMAC and CDC are structured to position Nigeria as a top-tier destination for credible, bankable and investment-grade data.
“These centres will provide cost-effective data and analytics solutions for investors, financiers, operators as well as resources for oil and gas capacity building and training,” Buhari said.
Commenting, the Director of DPR, Sarki Auwalu, said the creation of NOGEC began with the express mandate of President Buhari seeking to reduce cost, improve efficiency and create employment in the industry.
“DPR identified five key initiatives that will help to achieve the intent of Mr President’s mandate. It is pertinent to note that the entire oil and gas business is hinged on revenue and safety, which provide the basis for identifying the five initiatives that form the pillars of NOGEC.”
Auwalu also said the industry now has the resources and platform to interact, cooperate and collaborate on salient industry issues for optimum performance.
On his part, Mr Jones Chuma, an oil and gas analyst in Abuja, said it was time the government began a drastic shift from crude oil dependence while adding value to the oil and gas sector.
“The shift or advancement we seek in the oil and gas sector would never come if there is no apparent move to promote research, development and a knowledge-driven economy. So I believe the establishment of NOGEC by President Buhari is apt,” he stated.
In the meantime, Nigerians may experience much more drastic action in promoting knowledge-widening in the oil and gas industry, according to the NNPC boss, Kyari.
Speaking at Usmanu Danfodiyo University’s 2021 First Quarter Public Lecture Series in Sokoto on Monday, Kyari said in line with this drive, NNPC has established a Renewable Energy Division and completely transformed the NNPC Research and Development (R&D) Division to NNPC Research, Technology and Innovation Centre.