Minister of State for Petroleum Resources, Dr Ibe Kachikwu has explained that no International Oil Company (IOC) is planning to exit Nigeria, contrary to reports in some section of the media.
While briefing newsmen after a facility tour of ExxonMobil Erha Floating Production Storage and Offloading vessels (FPSO) in Lagos on Sunday, Kachikwu said that it was not possible for a company like ExxonMobil to sell off its assets for the small amount quoted in the report as its assets were worth much more than that.
FPSO unit is a floating vessel used by the Offshore oil and gas industry for the production and processing of hydrocarbons for the storage of oil.
Erha FPSO has a liquid storage capacity of 2.2 million barrel, making it one of its biggest kind in the world. The Erha field and Erha North satellite field, was completed in 2006.
The fields are located approximately 97km offshore Nigeria in water depths ranging from 1,000m to 1,200m. They were developed with an investment of 3.5 billion dollars.
“I have confirmed that it is not true, there are going to be here for a long stay, they will be here over the next 50 years, they are looking for more, they are doing all kinds of things, they just begun the exploration campaign first time in four years because of the new cash call policies we put in place.
“That is not a sign of somebody who is exiting. But different from not exiting is to be aggressive. ExxonMobil needs to be more aggressive in terms of development policies,’’ he said
He added that ExxonMobil need to be more aggressive with business as Bonga South west was almost on FID, Egina just kicked off and AGip is struggling to get Zabzaba online.
“So, I need to see a very robust development,’’ he advised
Commenting on the aim of his visit, he said that it was to encourage the company and see the development programmes as well as share in the challenges they were experiencing in their operations.
“First is to draw attention to the very complex and complication of operations of FPSOs when we do production off shore.
“This is about 100 km from Land, and part of the thing I am doing this month is visiting some of them. Including Egina that is just recently buoyed in different location and the one of Agip.
“I am here to look at what they are doing, to encourage them to continue the fantastic work they are doing and also discuss with them what their problems are,’’ he said
According to him, the visit is also to draw attention nationally and internationally to the few challenges in operations as complicated as this one.
He urged the company to brace up to the challenges in the sector as oil had recently been found in many African countries.
Earlier, Mr Richard Laing, ExxonMobil Executive Director, Production commended the minister for making out time to visit the facility and reiterated that the company had no plans to exit Nigeria.
“We are happy with Nigeria, We have our differences, we don’t agree on everything, we are happy and content. We are delighted over the minister’s visit and we are happy that he has come back to his spiritual home.
“As the minister said, the corporation has been here for many years, we intend to stay, we have ambitious growth programmes to build wealth and grow business to make more profit, key into the gas commercialisation project.
“We fully support what the minister said and we look forward to working with him,’’ he said .
Laing said that the company was being faced with the challenges of competition for capital and expertise in running the business.
In the meantime, Dr Ibe Kachikwu has also urged ExxonMobil and other International Oil Companies operating in Nigeria, to key into the gas commercialization policy of government for gas development in the country.
Kachikwu gave the advise while fielding question from newsmen after visiting the ExxonMobil Erha Floating Production Storage and Offloading vessels (FPSO) facility in Lagos, On Sunday.
An FPSO unit is a floating vessel used by the Offshore oil and gas industry for the production and processing of hydrocarbons for the storage of oil.
Erha FPSO has a liquid storage capacity of 2.2 million barrel, making it one of its biggest kind in the world. the Erha field and Erha North satellite field, was completed in 2006.
The fields are located approximately 97km offshore Nigeria, in water depths ranging from 1,000m to 1,200m.
The fields were developed with an investment of 3.5 billion dollars.
He said that gas would be parallel income stream for the country if everyone key in to implement the gas commercialization policy
“There is so much we can do with oil, we are doing that.I like to see oil go up in barrels, up to 3 million barrels but most importantly, I like to see gas begin it life.
“If you look at the production, a lot of gas is been rejected. And everybody is talking of gas in the country and gas is going to be parallel income stream for the country.
“We have talked about it too much, but fiscal terms have to be agree PSC terms, commercial terms for gas need to be agreed and once we unlock that , the issues of power becomes secondary.
“My message here today is, thanks for the fantastic work you are doing but there is a huge amount of work left undone,’’ he said.
He said that the country had volume and reserves of oil to produce in the next 40 to 50 years but the gas was still lying untapped.
He said that a lot had been done under the gas commercialization policy adding the LPG deployment had started in the country.
“But those are just torching the fringes, what is important is coming up with right commercial terms, get that done as rapidly as possible and let everybody who have access to gas to development,’’ he added.
He said that government had received submission from all oil companies keying into the policy to help exit gas flare.
“It is a different thing from dealing with gas development itself. There are many ways to stop flare, you can inject it and that is what has helped us achieved about 70 per cent factor in gas flare exit but that is not real exit, that is manage exit.
“For you to exit it, you must have the right commercial terms so that people can produce gas and make it commercial,’’ he said.
He stressed the need to develop gas for commercial purpose, adding that it remained the big elephant in the room.