Plans by the Nigerian Petroleum Development Company (NPDC) to invest $6.1 billion in its oil and gas operations are potentially seen to boost gas production that could ease pressure on the supply deficit that currently hinders the supply of electricity.
The NPDC plans to between now and 2018 grow its gas production to 900 million standard cubic feet per day (scf/d) as well as push its crude oil production to 300,000 barrels per day.
A breakdown of the sum shows that the NPDC intends to make an investment of $1.8 billion annually in 2014 and 2015. By 2016, the investment portfolio of the company would begin to scale down to about $800 million annually through 2018, thereby bringing its total investments to $6.1 billion over the period.
The expansion programme for both the Utorogu gas and Oredo plants, which is currently on-going, as well as the arrangement with Pan Ocean Oil Corporation, would enable the company to achieve this significant milestone in gas supply.
All these arrangements are approaching completion. With the completion of these gas processing plants, more volumes of gas would be produced to meet the needs of the domestic gas market, especially the power sector.
Much of the gas that would be produced from the various fields would be used to generate the electricity needed to improve supply to consumers, said Victor Briggs, managing director, NPDC.
The investment is coming at a time when major oil companies have refused to make investment in gas production because of the low price of domestic gas and lack of other incentives.
Many of the power stations in the country are not working because of lack of gas. About seven of them have been shut down in recent times, while the country’s generating capacity has dropped to less than 3,000 megawatts (MW) per day of electricity. The 900 million scf/d, if deployed to generating electricity, is capable of churning out 3,000MW.
Briggs, however, said this ambitious target would not come to fruition until 2018. Stakeholders in the power industry also say it would take about five years to restore stability to the sector.
The NPDC boss, who said the company was now one of the major suppliers of gas in the country, explained that it was currently producing between 450 million and 510 million scf/d. This is expected to hit 600 million scf/d by the end of this year, and eventually increase to 900 million scf/d in 2018.
In addition to the increase in gas supply, the investment is expected to significantly raise the company’s daily crude oil production to 300,000 barrels per day from its current capacity of about 140,000 bpd.
Briggs, while speaking on the efforts made by NPDC to add value to the assets it assumed operatorship of since the first divestment by Shell Petroleum Development Company (SPDC) took place, explained that the company has improved on its exploratory and production activities in the last two years and has rehabilitated much of the infrastructure.
He said work was initially slowed down by dilapidated infrastructure and the bureaucracy of replacement processes, adding that the company plans to drill between 15 and 18 wells this year, as against the eight it drilled in five years.
By: Olusola Bello
