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Seplat Petroleum seeks domestic energy security

By BusinessNews Staff on August 6, 2015

The London-listed Seplat Petroleum Development Company (SPDC) Plc has stated that domestic energy security was key to Nigeria’s future development, stressing that this could be achieved in the next five years.

Speaking on Tuesday in Lagos at the 2015 conference of the Nigeria Council of the Society of Petroleum Engineers (SPE), the Chief Executive Officer of Seplat, Mr. Austin Avuru said that in 2010 when his company inherited assets from Shell, the installed gas processing capacity was 120 million standard cubic feet (SCF) per day, while actually delivery was only 60 million standard cubic feet per day.

“We came in, inherited these facilities and set out to expand these facilities because we saw a future in gas three years ago, before people saw it. Today, we have revamped the existing 120million – 130 million standard cubic feet per day and have built new 150 million standard cubic feet per day.

“Today, our total processing capacity is 300 million standard cubic feet of gas per day, but we are actually delivering between 240 million and 280 million SCF per day into the domestic market,” he said.

“There will be a second phase in our gas project, where we are going to install additional 225 million SCF processing capacity in addition to what we have. So, that is why I say that by the end 2017 we will have a capacity to process 500 million SCF of gas per day,” Avuru explained.

He emphasised the need for increased exploration for more gas reserves, adding than if an updated audit of Nigeria’s gas reserve is done, it will put the nation’s gas reserves at 120 trillion cubic feet (tcf) instead of the 170 tcf being touted for over a decade now.

Avuru said that if Nigeria achieves 1.2 million barrels per day crude oil refining capacity in addition to a natural gas production of about 7.3 billion cubic feet per day of gas, that will translate to about 32,000 megawatts of power that would enable the country “become a massive exporter of cement, fertilizer, and petrochemical products.”

According to him, these developments will turn the oil and gas sector into an enabler of massive industrial development instead of just being a mere source of revenue that contributes less than 15 per cent to the country’s GDP.”

Avuru called on the Nigerian National Petroleum Corporation (NNPC) to sell all its four refineries instead of doing perpetual Turn Around Maintenance (TAM).

“Nigeria can easily achieve a refining capacity of 1.2 million barrels of oil per day (bpd) if Dangote’s 600,000 bpd refinery comes online in addition to the 445,000 bpd nameplate of all the NNPC refineries, which if sold to competent hands would achieve its optimum production capacity,” Avuru said.

In his address, Joseph Dawha, the out-going Group Managing Director of NNPC, represented by Abubakar Nuhu Mohammed, said the target was to hit 90 per cent utilisation of the refineries, which will enable them to meet 40 per cent of Nigerians petroleum products need, adding that a long term plan should be for new refineries to come on stream.

One of the challenges of the oil sector in recent years, according to Dawha is the high incidence of crude oil theft, which he put at about 250,000 barrels per day.
He restated the position of Buhari’s administration that “at the price of $100 per barrel, about $39.39 billion was lost by Nigeria to crude oil theft between 2010 and 2013”.

Dawha stated that public enlightenment on the negative impact of crude oil theft on the economy should be embarked on in addition to the enforcement of anti-sabotage laws to deal with the situation.

Other challenges facing the oil and gas industry according to Dawha include the current slide in oil prices, Joint Venture funding challenges, lack of gas infrastructure and the fiscal stability required for project financing in the sector.

[ThisDay]

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