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Production targets are no big deal , Egbogah ; Nov 29, 2010

Feeling the need to reiterate government’s faith in the production targets, the Presidential Adviser on Petroleum, Dr. Emmanuel Egbogah, in an interview with journalists had this to say as recorded by Clara Nwachukwu..




Can you tell us exactly what are the strategies put in place to achieve these targets?


When you talk about the strategies, what we have done is that when we worked on the Vision 20: 2020 plans, we considered this situation of our ability to do 4million barrels of oil per day and 40 billion barrels reserves by 2012.


So we have put in place, what you will describe as strategies on what needs to be done, how it should be done and who should do it. And so, very soon, the companies that are saying that they couldn’t see it from where they were they will soon see because obviously, every one of them will contribute to that being achieved.


So the assignment of who does what, will go out to all the companies and we have the details about how to do it.


But the level of scepticism shows the will is not there?


There are always a lot of scepticisms about everything in Nigeria, but the fact is that to achieve the 40 billion barrels of oil reserves, actually is not a big deal, because we are currently sitting at 38.2billion barrels, and from what is going on in the deep upstream, I don’t see how we cannot achieve the 40billion even before the 2012 that we set as out time to do so.


That is not really a problem; the same thing is the 4million bpd. It’s not a big thing that we cannot achieve because right now, we are sitting comfortably at a production capacity of 3.7m, which means that if we can produce that today, there are just a few things that we need to adjust here and there, and we can do them. Therefore, 4million bpd by 2012 is not going to be a big deal.


Where will these additional barrels and reserves come from?


The additional barrels and reserve will come from the deep sea and from onshore because in the PIB, we have given extra incentives to work on a lot of the onshore fields that are have been abandoned by operators rushing to the offshore over the years because of militant activities.


… And Militancy has resumed?


Militancy has not resumed. Yes, there are a few incidents that have happened, but, you know very well that by the amnesty programme that the President offered, we have achieved a lot of improvements, because at the time the amnesty was offered, we were hovering around 1 and 1.2m bpd, but thereafter, we have been steady at 2.6 and 2.7m, so the recent incidents, one or two off cases are not enough or a signal that militancy has resumed.

But there are always individuals, who go out of their way to commit criminal acts, and this is not what you may call militancy, this is pure criminal activity.


Militants have warned of more attacks across all oil installations in the Niger Delta?


I cannot actually respond to that but we are in communication with the people and the amnesty programme people and this new wave of militancy are actually outside the scope of what have been doing. That is why I said that sometimes you have some brigands, some robbers who come out to do certain things that are not expected. That is probably the case.


One cannot see any justification because all what we have done today, is to accommodate the demands. I, myself, championed the cause of giving the assets to the host communities where they are now participants and we are in the business together.


Therefore, they actually have the responsibility to protect the facilities, the pipelines, and all that because we have written them that any further act of vandalism will invalidate the agreement, and therefore the  dividend they will get from it. So it is their responsibility to protect that which is their own. This guys doing what you have just described are not within this system of consideration.


How far has this dividend gone in view of the promises made?


I am not sure what arrangement you are talking about, but what we have is an arrangement we started by giving 10 per cent equity participation, that is, assets of all the oil productions to the host community.


Because of legal and other issues, we have done a modification of that to make it more implementable, because the old design that we had would have taken  lot of fiat, a lot of processes, constitutional reviews and all that, so we have changed it, and worked it out and said, it is dividend now to the host communities.


In fact, that dividend works out to be much more higher than the 10 percent originally offered. This dividend is easier to issue, easier to redeem, and the calculations we have made shows that the value of that dividend, which is based on the actual assets value that is resident in their communities will give them significant control and ownership of oil and gas resources.


Won’t this create problems for the communities?


Why would it create problems when you’re getting more why should that be problem? The issue of sharing _Do you believe that we will just go and throw money at them at the village square to share? No, we have programmes, we have activities, and we are going to create fund managers and trusts that are going to be responsible for helping them to administer the funds.


The essence of this is to ensure that every one of them gets full share of what belongs to them and it is going to be properly managed on their behalf. So it is not going to be money thrown at them and say, ”go and share“.

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