The federal government is set to cut its annual cost of operations in both offshore and remote locations by half following the launch of the National Oil and Gas Excellence Centre (NOGEC) Lagos.
The Minister of State for Petroleum, Mr. Timipre Sylva, who said this on Thursday launch of the centre said the projected 50 per cent reduction would lead to the realisation of the $10 per barrel oil production cost target.
The centre, which is sited at the Department of Petroleum Resources (DPR)’s annex in Lagos, was launched virtually in Abuja by President Muhammadu Buhari, who said that the centre would enhance oil and gas contribution to the country’s Gross Domestic Product (GDP) and strengthen Nigeria’s position as Africa’s leader in oil and gas industry.
The NOGEC is structured to drive three-prong objectives of safety, value and cost efficiency in the Nigeria oil and gas industry, under five flagship centres, including Search, Rescue and Surveillance (SeRAS) Command and Control Centre.
Others are the National Improved Oil Recovery Centre (NIORC), the Oil and Gas Dispute Resolution Centre (DRC), the Oil and Gas Competence Development Centre (CDC), and the Integrated Data Mining and Analytics Centre (IDMAC).
Sylva, who cut the tape and unveiled behalf of the President Buhari, said the centre would help in driving cost reduction, increasing production and enhancing value in the nation’s oil and gas industry.
He said: “Let me at this point to highlight the main elements of each of these centres to underscore its role in driving cost reduction, increasing production and enhancing value in the industry.
“Search, Rescue and Surveillance (SeRAS) is a flagship programme of the centre designed to enhance safety management, emergency preparedness and response and routine transportation for bed space management.
“SeRAS will, therefore, drive cost reduction and improve operational efficiency across the industry. Conservatively, it is projected that upon full implementation of SeRAS, the annual industry expenditure for offshore and remote locations, flight logistics and emergency response will reduce by up to 50 per cent, a significant gain towards our target of reducing cost-per-barrel across our operations.”
The minister of state said the National Improved Oil Recovery Centre, another flagship unit of the centre, was designed to promote the implementation of improved and enhanced oil recovery technologies that would arrest the incidences of production decline and resultant high cost in oil asset, especially in the Niger Delta basin.
“In essence, the centre will trigger secondary and tertiary recovery operations in the industry.
“The centre will collaborate with operators, global technology centres, international oil and gas regulators and other relevant parties to leverage experiences and best practices for application in Nigeria,” he said.
Sylva noted that the expectation is that the “foregoing measures would result in reserves growth, production increase, field life extension, improve asset cycle cost and reduced cost per barrel, all with positive impact on national economy and investors’ profitability.”
He also explained that the Oil and Gas Alternative Dispute Resolution Centre was created to arrest the prevalent value erosion attributable to sub-optimal development or non-development of oil and gas assets due to lingering disputes in the industry.
The centre, he said, would offer arbitration, mediation and conciliation services by utilising industry’s technical experts, who would provide fair and balanced resolutions of industry related disputes from an informed position.
“The centre will take advantage of resources of the ADR to ensure alternative dispute resolutions that result in value optimisation in terms of resource growth and global competitiveness,” Sylva said.
He said the other two units -the Interested Data Mining and Analytics Centre, and the Oil and Gas Competence Development Centre were structured to “position Nigeria as a top tier destination for credible, bankable and investment-led data in the oil and gas industry and to serve as a regional hub of competence development respectively.”
These centres, according to him, would provide cost effective data and analytic solutions for investors, financiers, operators as well as resources for oil and gas capacity building and trainings.
“I wish to assure all that the NOGEC represents a state-of-the-art integrated facility that will provide the oil and gas sector with the much needed technical and resources, capabilities for stability, growth, safe operations and cost efficiency for the benefit of all stakeholders,” he added.
According to Buhari, “the creation of the NOGEC at this time is further demonstration that the Nigeria’s oil and gas industry has come of age, even against all odds.
“The NOGEC will serve as oil and gas industry cost-reduction centre and hub for industry best practices, technical support and competence.
“It will also act as the oil and gas tecno-economic bureau to support government and its entities in policy development and implementation efforts.
Buhari, however, called on all stakeholders to “redouble our efforts and confront the challenges of global energy dynamics, resurgence of the corona virus, unstable oil prices, and alternative energy.
“I, therefore, charge you all to rededicate yourselves to national duty and take full advantage of this excellence centre to meet the challenges.”