The Nigerian National Petroleum Corporation (NNPC) has said the targeted 40 billion barrels (bbls) Oil reserve by 2010 is no longer attainable.
Group Managing Director, (GMD) of the Corporation , Engr. Funsho Kupolokun, argued that enormous Energy requirements Are needed to achieve the set target as the reserve addition and replacement ratio need to increase by 200 per cent or 800 million barrels per day within the three years.
Kupolokun spoke on the challenges confronting the Oil Industry at the 31st Annual Conference and Exhibition of the Society for Petroleum Engineers (SPE) Holding in Abuja ,
He listed the Rising cost of production, funding challenge, and the Niger Delta crisis which culminates in Asset destruction and production shortage as some of the issues militating against the set target.
Kupolokun, regretted that efforts to repair the Chanomi Creek Pipeline, the feeder pipe for the Warri and Kaduna Refineries, which was blown up by militants since February 18, 2005 has not yielded results as most contracting firms have since fled the country following the crisis in the region.
“In terms of cost, every time you open the envelop these days you find Out that your cost expectation and what you get in reality is a difference of about 50 per cent cost gap as a result of Niger Delta , risk perception, contractors have shut down, a lot of them have gone Out of the country. I talk of Chanomi Creek today; I cannot even find a contractor that will do this job for me. We started with Willbros. They withdrew because of the problem. We went to Saipem, today is this Price, and tomorrow is that Price. So costing has become an issue,” he said.
Aside the lingering crisis, Kupolokun noted that ageing Assets put in place since over 40 years needed to be replaced. “Of course the fields Are also maturing, Assets Are aging, and the number of Assets and facilities that have been put in place 40 years ago, All these translate to cost implications.”
He said for Nigeria to become one of the top 20 in terms of economy, the country would need to grow the Gross Domestic Product by 10 per cent annually, and this would involve enormous Energy requirement.
“If you look at a number of countries, you will note that the Gross Domestic Product per Capital bears a relationship with Energy consumption per say. By year 2020 we have to be the number 20 in the economy,” he said.
The Vice President, Dr. Goodluck Jonathan, who declared the conference open, expressed Government ’s commitment to ensuring that Peace returned to the Niger Delta .
He said: “The key to meaningful Development in the Oil rich region was for the multinationals, Government Agencies , states and Local Government councils to do more to alleviate the sufferings of the people of the region.”
He stated that notwithstanding the increasing tension and uncertainties in the Oil Producing nations, the world was looking to Nigeria and the Gulf of Guinea as a Major alternative for Oil supplies.
“We must not lose sight of the fact that crude is a depleting Resource . Our greatest challenge therefore is to increase the reserve and production level to meet both Local and Global demand,” he said.
He added that Exploration activities within the offshore basins Are expected to increase rapidly with sustained production from matured offshore fields during the period, adding “that the age -old terrain of the Niger Delta , experts said, also has the potentials for New discoveries in spite of its maturity.”