Akin Akande, Abuja
International Oil Companies (IOC’s) have faulted the Federal Government of Nigeria for the inability to stop gas flaring since production began 50 years ago.
The oil firms also blamed the non-commitment of the government’s 60 per cent counterpart funding for the project aimed at channeling gas for domestic use as reason for delay in ending gas flaring in Nigeria.
The Executive Vice Chairman and General Counsel for ExonMobile, Dr. Emmanuel Ibe Kachikwu, made the revelation on Monday in Abuja in a keynote address at a workshop on oil and gas and dispute resolution, organised by the Nigerian Institute of Advanced Legal Studies.
“The truth about gas flaring is that, government has not made available its 60 per cent contribution for the construction of gas pipelines to channel refined product for consumption, the IOC’s are ready to fund its share of 40 per cent of the project to end gas flaring,” he said.
“Gas flaring can be stopped if government will commit its contribution of 60 per cent of the total cost while oil companies provide the 40% funds to complete the project,” Dr. Kachikwu also stated.
The keynote speaker, who spoke on the topic, “Maintaining Evolving Relationship In The International Petroleum Industry,” confirmed to The Post in an interview that Nigeria is very rich in gas products than oil, as every crude explored, has more gas component than oil.
“Nigeria is more rich in gas than oil, am not saying we don’t have enough oil, but for every crude exploration, we have more gas component than oil. If we commit resources to gas production, Nigeria will earn more from gas product as it,” he said.
Explaining the global trend of oil producing countries, repositioning and strategising how it can benefit from the international oil market, Dr. Kachikwu said Nigeria as owner of oil resources and regulator, need to depend on the relationship it has with oil companies operating in the sector in order sustain the gains from oil production.
“America for instance, was importing 25% of its oil consumption from Nigeria Five years ago, but the politics of global oil market, has seen the USA cutting oil importation from Nigeria to 15% due to the dynamics of internal oil discovery,” he explained
He said further: “There used to be six months demand ahead of time for the importation of oil products from Nigeria to other countries, but in the last Two months, we have had situations where loaded vessels with oil products are docked looking for buyers.
“Shell oil syndrome in China and the United States of America’s oil discovery is not helping matters, with Russia also joining the list of countries with vast internal oil reserve. Nigeria must begin to plan against the likely effect of abundant oil products without buyers, considering these development,” he added.
On the Petroleum Industry Bill pending before the National Assembly, Dr. Kachikwu said IOC’s do not have a problem with proposing a bill to guide the industry, but cautioned that the present fiscal terms of the bill are not workable for oil companies, due largely to the excessive powers given to the Minister of Petroleum Resources, the logistics challenges with the Nigerian Navy, the Ministry, militant activities, hostilities against expatriate and the MEND threats.
He compared the PIB in Nigeria to Angola where the oil industry policy is flexible and stable with the production of a barrel of oil at Eighteen Dollars against the Twenty Four Dollars cost per barrel in Nigeria, considering the challenges his identified above.
According to him, investors would like to run their business in Nigeria from Angola in spite of the abundant oil resources in the country, expert and qualified industry operators to confer Nigeria with the status of Africa’s oil hub.
Speaking on the future of the Nigerian oil industry, Dr. Kachikwu called on the government to start investing on infrastructure, using proceeds from oil sale, diversify the Gross Domestic Product of the country and effectively utilise the relationship it has with IOC’s.
Reflecting on the gains of alternative dispute resolution between oil producing communities in the Niger Delta and the oil companies, Director General of the Institute, Professor Epiphany Azinge SAN, said ADR is a veritable tool for achieving peace in the region.
According to Professor Azinge, the workshop was another milestone of the Institute’s effort to address national issues like oil resources, which touches all aspects of our national life.
“We cannot loss sight of the issues of oil and governance, that is why this workshop is organised to see how we can apply ADR in resolving disputes arising in the Niger Delta region, oil producing communities and the multi-national oil companies”.
He explained that the impact recorded in the ADR programme recently held in Lagos, needed to be deployed in the oil and gas sector to ensure steady production.