The Nigerian government on Monday urged African oil producers to adopt a common approach to tackle industry challenges to reap the full benefits of the economics of scale in the development of the hydrocarbon resources in their domains.
President Muhammadu Buhari said at the opening of the 6th Congress of the African Petroleum Producers Association in Abuja that members could find areas of cooperation and partnership in issues affecting their common interests.
Noting their efforts at harmonizing oil and gas legal frameworks in their various countries as well as development of indigenous capacities for local content and capacity building, the president, who was represented by his deputy, Yemi Osinbajo, said they must explore mechanisms to expand regional refining capacities in an efficient and cost effective manner.
“We must focus on getting more from our hydrocarbon resources by promoting value in local addition and investment through sustainable policies. A common approach will ensure that the whole of Africa benefitted from the economics of scale in the development of our resources,” he said.
The president urged the association to recognise the importance of developing domestic refining capacity as critical to sustainable economic growth, in addition to coming together to set realistic targets for gas flare-out in the region.
“The future of Africa oil and gas industry is here. Together, we have all the resources we need and we can develop all the necessary capacities. There is no reason why the African oil and gas industry should remain tied to the apron string of oil and gas industries elsewhere. Members of APPA have great responsibility of delivering this great potential,” the president said.
The president said the APPA meeting was coming at a time Nigeria and other petroleum producers in Africa were facing enormous challenges in the oil and gas industry requiring urgent solutions.
With falling oil prices, production cost of rising and profits declining sharply, he said the relevance and creativity of APPA was being put to test, pointing out that there was need for them to be creative in finding solutions to the problems in the hydrocarbon industry, which accounts for significant proportions of government revenues.
He identified the challenge in supplying gas-to-power, saying the gas sector was the most obvious way of paying for the development of needs of most African countries.
For Africa to meet the global requirement for gas, he said it was an imperative for producers to partner and develop a robust gas infrastructure to jointly address the problem.
Out of a global reserves of more than 185 trillion cubic feet of gas, and discovered reserves of over 400 trillion cubic feet, with a capacity to peak at over 600 trillion cubic feet, he said Nigeria has done a lot to develop the sector.
Apart from establishing the Nigerian Gas Company, NGC to provide supply gas to newly established power plants, the president said the country was actively involved in the West African Gas Pipeline project to deliver gas to four West African countries.
He said it was time for gas producers to take more firmer stand on gas flaring, both from an environmental and waste of resources perspectives, adding that out of over 150 billion cubic feet of gas flared globally every year, Africa flares over 40 billion cubic metres, of which about half was by Nigeria.
The Group Chief Executive, Sahara Group, Tonye Cole, one of the sponsors of the conference, said one of the best things to happen to Nigeria and Africa at this time was the current decline in crude oil prices.
Mr. Cole said the crisis has created opportunity for government officials, businesses, institutions and others to come together to seek solutions to the threats to the survival of their economies and long term investments.
Urging participants to take full advantage of the vast human resources the continent has, by looking inwards to bring solutions that work for the continent, Mr. Cole said Sahara Group was glad to part of the effort to find solutions to Nigeria’s economic problems.
Other sponsors, including Chevron Nigeria Limited, CNL; ExxonMobil Corporation; Total Nigeria and Shell Nigeria, also underlined the need for cooperation and partnership in the search for collaboration, practical solutions to move the industry in Africa forward.
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