The last week launch of the National Oil and Gas Excellence Centre (NOGEC) in Lagos State, is a major boost for the Oil and Gas Industry as it’s set to improve safety, optimise value and ensure cost efficiency.
Last week, players in the Nigerian oil and gas industry received a great relief with the eventual launch of the National Oil and Gas Excellence Centre (NOGEC) Lagos by President Muhammadu.
Inaugurating the facility, Buhari said the centre has opened a new set of opportunities for the Nigerian petroleum industry in terms of investments, cost reduction, safety in operations and capacity development.
According to him, “The establishment of the National Oil and Gas Excellence Centre (NOGEC) aligns with my administration’s commitment to foster stability, growth and sustainability of the Nigeria Oil and Gas Industry consistent with the economic development and sustainability agenda articulated in the National Petroleum Policy 2017, National Gas Policy, 2017, Economic Recovery and Growth Plan (ERGP) and the Economic Sustainability Plan (ESP), 2020.
“This ceremony of the official launch of the National Oil and Gas Excellence Centre (NOGEC) – an integrated resource complex to drive Safety, Value and Cost efficiency in the Industry – is yet another milestone in the development of the oil and gas sector and the realisation of greater value for all stakeholders.”
He said the creation of NOGEC at this time further demonstrated that the Nigeria oil and gas industry had come of age, even against all odds, explaining that NOGEC would, “serve as oil and gas industry cost-reduction centre and hub for industry best practices, technical support and competence.”
Buhari added that NOGEC, “will also act as the oil and gas tecno-economic bureau to support Government and its entities in policy development and implementation efforts.
“Above all, the Integrated Centre will enhance the contribution of the oil and gas sector to the nation’s GDP as well as strengthen Nigeria’s position as regional leader in the oil and gas industry.”
While acknowledging the achievements recorded so far, Buhari said, “we must not relent. Rather, we must redouble our efforts and confront the challenges of global energy dynamics, resurgence of the corona virus, unstable oil prices, and alternative energy.”
However, in Nigeria, the oil and gas industry, especially the upstream segment, faces a lot of risks arising from insecurity of assets and personnel, dwindling value of assets and high cost of operation.
These pose major disincentive to investors and result in heavy drop in investments as some companies that could no longer cope with the situation have had to move their investments out of the county.
Oil assets in the Niger Delta are, on a regular basis, attacked by militants and oil thieves either by blowing up oil pipelines at the slightest provocation and protest or by stealing huge volumes of crude on a daily basis, to the detriment of the companies and with huge economic hemorrhage to the nation.
The development remains a major reason why Nigeria has not been able to achieve its three million per day oil production aspiration.
Ironically, to mitigate such losses, the companies resorted to committing huge amounts of their hard-earned money to either employ more security to guard their assets and personnel or engage in paying the same militants and thieves to stop or slow down their evil deeds on the assets, aside the normal corporate social responsibility commitments to the host communities.
They also spend even more on fixing their assets that have been destroyed. All these significantly contribute to the high cost of operation which the industry suffers in the country, which does not exist in other countries.
It was this high cost of oil-per-barrel production in Nigeria which is far above $10, unlike many oil producing nations, which prompted the pursuit of $10 per barrel oil production benchmark by the Nigerian National Petroleum Corporation (NNPC), whose target was set for the end of fourth quarter of 2021.
Those industry challenges, including issues around skills gap and outdated method of operations, are what the NOGEC is set to significantly address, for the benefit of the companies, the nation and the communities.