Investment in the downstream sector, particularly in refinery projects, is now the condition for issuance and renewal of concessions and oil licences to International Oil Companies (IOCs) in Nigeria.
Director of the Directorate of Petroleum Resources (DPR), Mr. Billy Agha, who disclosed this at a quarterly media briefing in Lagos yesterday, said Federal Government has directed that companies that fail to meet the fresh condition will not be issued with oil licences and will also not have their concession renewed.
Licences issued in 1968 expired after the 40-year lease on the oil blocks last year, but the government renewed the licences for one more year. They will soon be up for another renewal.
“Before any company will henceforth get its concession renewed, it has to invest in downstream projects and we want this to be in refinery project,” he said.
Agha who lamented the poor state of the four refineries in Nigeria stated that at the moment all the refineries are “dead”.
He put the combined average performance of the refineries during the period under review at 6.66 per cent, while the average crude oil received was 3,403,432bbls.
He also disclosed that the total crude oil production for the third quarter of 2009 was 214.6 million barrels, at an average daily rate of 2.333 million barrels per day.
Giving further breakdown, he said the July average was 2,260,224 bpd. In August, it was 2,280,197 bpd, while that of September was 2,462,516bpd.
He also revealed that the nation’s crude oil reserve has hit 38.6 mostly from the deep offshore.
“As at January 1, 2009, the nation’s oil reserves was at 33.41 billion barrels of oil, condensate reserves was 5.20 billion barrels (38.61mmb). There is an observed net increase of oil reserves of 480 million barrels against January 2008 Reserves, representing about 1.46 per cent increase. The increase is noticeable mostly in Production Sharing Contracts (PSC) Assets in the Deep Offshore areas,” he said.
Agha said owing to the inclusion of condensate, the country currently produces over 2.2 million as against the 1.67 million barrels per day imposed by the Organisation of Petroleum Exporting Countries (OPEC).
The DPR boss also disclosed that production deferment for the third quarter of 2009 was as follows: June, 634,371bpd, July, 827,517bpd, and August 2009: 893,523 Barrels per day. The deferments, he explained, were as a result of the Niger Delta crisis and other operational problems.
In terms of revenue generation, he said the agency remitted about N312 billion to the Federation Account during the said period.
Meanwhile, President Umaru Musa Yar’Adua has directed the government team to step up consultations with Labour and other stakeholders to ensure that the issue of deregulation of the downstream sector of the oil industry is amicably resolved.
The Group Managing Director of the Nigerian Natio-nal Petroleum Corporation, Dr. Mohammed Sanusi Barkindo, who spoke to journalists yesterday, said the corporation was pushing for the granting of financial independence to the four petroleum refineries as a means of guaranteeing efficiency and viability of the companies.
Barkindo said consultations on deregulation were continuing as directed by Yar’Adua, just as steady progress was being made on several issues.
Speaking on the protracted talks between government and the Nigeria Labour Congress (NLC) and its allies, Barkindo said the president had given his word that negotiations must continue until the matter was amicably resolved and that government would not take any unilateral action to impose deregulation.
“Consultations have been going as directed by Mr. President because he does not believe in unilateral action,” he said.
He described the negotiations as very important and critical to the country’s national development aspiration.
“I also want to add my own voice to say that Nigerians should take note of the consultations that has been going on between government team and all the stakeholders because good governance is about consultation in decision making devoid of unilateral actions. We believe in collective decision and I believe that the decision that will be arrived at will be in the larger interest of Nigerians,” he said.
Barkindo said it is particularly noteworthy the constructive and mature manner in which the labour team has handled its submissions.
“I want to use this opportunity to state that the ongoing consultation between labour and government on deregulation is not deadlocked. The NLC has accommodated our key requests and we have also taken into account their very valid concerns.
“We welcome their setting-up of a 10-man committee under the leadership of the Deputy President of the NLC Comrade Peter Adeyemi to continue with this dialogue and consultation during and after the deregulation,” Barkindo stated.