Juliana Taiwo
18 November 2008
Abuja and Ejiofor Alike — President Umaru Musa Yar'Adua has assured multinational oil companies operating in Nigeria that their interests will be taken into consideration in the ongoing reform in the oil sector.
The President gave the assurance while receiving the President of Exxon Mobil, Mr. Rich Kruger, who led an eight-man delegation to the State House, yesterday.
The president's assurance came just as the Federal Government yesterday challenged oil exploration companies operating in the country to step up oil and gas exploration activities in six other Nigerian basins, apart from the mature Niger Delta, so as to meet the government's reserves target of 40 billion barrels by 2010.
The President said Nigeria had enjoyed a long relationship with the companies, adding that, "I assure you that as we reform the national oil company, we will take into account the mutual interests of the international oil companies and the Federal Government. The reforms meant to restructure our national economy will be a win-win situation for Nigeria and the oil companies.
"We will ensure mutual consultation, so that we can transform our national oil company without upsetting the relationship we have with our partners."
Speaking earlier, Kruger explained the current activities of Exxon Mobil in Nigeria, the company's plans for more investments in the oil sector and areas of mutual interest.
Minister of Finance, Shamsuddeen Usman, had in July this year, identified two reasons why many reforms, including the power sector reforms, had not yielded tangible results even after large sums of money had been sunk into the sector.
"These", according to him, "are lack of comprehensive review to understand the issues involved and lack of adequate planning to properly anticipate issues and problems that may arise in the course of implementation. This is what has bedevilled the power sector in Nigeria."
Shamsuddeen had told Finance correspondents, "We rushed, we spent huge sums of money, yet no tangible results."
He had therefore asked Nigerians to be patient with the Yar'Adua administration which is doing everything possible to avoid the pitfalls of the past.
Meanwhile, Minister of State for Energy (Petroleum), Mr Odein Ajumogobia, speaking in Abuja at the 26th International Conference and Exhibition of the Nigerian Association of Explorationists (NAPE), noted that there had been no appreciable growth in the country's oil and gas reserves in the last five years despite the known potential in onshore and deep water.
"Uncommonly known to many is the fact that Nigeria has seven sedimentary basins of which Niger Delta is most active and prospective for oil and gas. I would encourage you to make use of all available geo-technologies to de-risk the prospectivity and step up exploratory activity in other Nigerian inland basins - Anambra, Benue, Bida, Chad, Dahomey and Sokoto Basins -apart from the Niger Delta," Ajumogobia said.
The minister stated that conventional oil and gas which are staples of the country's energy diet are increasingly becoming hard to find.
According to him, supplies of conventional oil and gas will struggle to keep up with increasing demand.
"We are told there are still large amounts of hydrocarbons in the ground but what is left are probably in greater and more challenging depths in the landed areas or under very deep oceans and very thick ice. It will take huge amounts of technology, energy, money and patience to get at it," he added.
Ajumogobia also said that the world is being forced to search for hydrocarbons either in unconventional areas or tap less conventional sources of oil such as oil sands and oil shale.
He stressed the need for the country to continue to replenish and grow the reserves base, and not allow market uncertainties to distort its decision to excplore more, adding that it makes sense to find the volume first , and later decide when to bring it to production.
The minister decried the falling prices of oil in the international market and the recent financial crisis that is crippling businesses across the world.
According to him, the instability created in the market due to frequent high and low swings in prices within short periods was equally worrisome.
"At times, we saw price flunctuations between $5 and $10 per barrel in just one day! This instability presents uncertainties which make decision making quite difficult especially with respect to investment and production levels," he said.
"For us in Nigeria, similar to other OPEC members, we are now faced with double impact of reduced production quota and low crude oil price. This has created a climate of uncertainty and directly impacts global crude oil demand and supply dynamics. In particular how much future production capacity will be required and what levels of investment will be ideal?," Ajumogobia added.
The minister was however upbeat that despite these uncertainties and challenges, the world will continue to rely on fossil fuels to warm buildings, light and power homes and businesses, as well as transport people and goods.
"Therefore, we must grow reserves and expand production to meet the predictions", he added.
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