Speaking at the 38th edition of SPE conference which has the theme as “Natural Gas Development and Exploitation in an Emerging Economy Strategies, Infrastructure and Policy Framework”. The NNPC director said that out of the 90 per cent production capacity of the country’s output crude production, about 40 per cent would be on Premium Motor Spirit (PMS) which is known as petroleum.
He said that additional refineries would be expected at the long and short term to increase the country’s refining capacity and domestic consumption.
According to him the Federal Government was committed to the gas development and revive of gas infrastructure.
He said that the nation was in need of renovation and Petroleum Industry Bill (PIB) that would define the country future oil and gas production and generation.
“The PIB has been in the pipeline for 15 years. We are hopeful that the present legislature will address the bill,” he said.
He said that crude oil theft had been a major challenged in the country, adding that the decline has been impacted on the on the average sale of government equity crude, with an average joint venture cash call budget of about $600 million per month.
According to him, the drop of earnings from government crude to average of about $460 million potential present yearly funding of about $4.8 billion.
“ This comes at a time when the cash call budget has remained unattainable in the last few years.
“ Management of funding is our most immediate challenge and innovative financing approach is currently being developed to address the issue.
“Another challenge is the development of shale oil in Nigeria’s largest market US, this has forced Nigeria to look for alternative market in Asia.
“Despite these challenges we are focusing on strategic realignment of our crude oil exports to graphically and more direct and user transactions in sustainable markets
Muhammed said that crude theft and pipeline vandalism and crude oil as impacted on production in the last four years in 2010 to 2014 from 2.4 million barrels per day in 2010 to about 2.0 million barrels per day in 2014.
He said that the significant production interruption is now a regular feature in Nigeria’s production profile, an average 250,000 bpd was deferred.
“At the price of $100 per barrel, this amounts to a loss of about $9.1 billion yearly.
“ Crude theft from January to April 2015 stood 39.3 million barrels $3.9 billion at an average crude price of $97.9 per barrels.
“The solution lies with setting up of a critical infrastructure force with accountability measures, with a continuation of enlightenment, empowerment and enforcement of anti-sabotage laws.
“ In a bid to address the current sub-optimal performance of domestic refineries, a new rehabilitation strategy has been adopted, he added.
Also speaking , the Managing Director, Exploration and Production Nigeria Ltd, Mrs Elisabeth Proust, said Nigeria has very tremendous gas reserve, about 46 trillion standard cubic feet (TCF) of the reported 178 tcf of discovered gas resources is currently developed or under development.
Proust who was reprtersented by Mr Ahmadu Kida, Deputy General Manager said that therefore, a joint effort by all stakeholders is needed to 133tcf unlock the remaining 133tcf of gas so that we can power the industry and boost the economy.
According to her, today, more than 1,400 megawatts of Nigeria’s total power generation is fuelled by diesel.
“Even as three times the current regulated domestic gas prices gas price power generation will be only a third of that of diesel.
“With the right enabling environment, Nigeria will benefit domestically from the multiplier effect of the natural gas in other to diversify the economy create jobs and further boost the economy.
She said that Nigeria gas production was hampered by many challenges which including inadequate infrastructure and pipeline vandalism.
Proust however, said that Nigeria gas development would develop if the government would settle all outstanding debts.
She said that there should be deregulation of gas price and sufficient infrastructure, while calling for adequate funding and provision of conductive environment for people to operate.
Mr Austin Avuru, Managing Director Seplat Petroleum Development Company stressed the need for the nation to optimally harness its huge gas resources to meet the national aspirations.
According to him, Nigeria needed to start looking for more gas, dwell on full gas utilisation and undertake reserve audits.
Avuru said that for the country to generate 32gigawatts electricity, it would require 7.3billion Standard Cubic Feet (BSCF) of gas.
He said that it was time for the country to start looking for more gas for domestic and commercial values.
He said that the country needed more reserves on gas and crude oil.
Earlier speaking In his welcome address, Mr Emeka Ene, the Chairman of SPE Nigeria Council said that oil and gas played important role in the economy of the country.
Ene assured that all contributions of stakeholders would be submitted to federal government for assessment.
The SPE conference withnessed over 600 participants, and 60 exhibitors in attendance.