Yemisi Izuora
The Chairman of Heirs Holdings Group and the United Bank for Africa (UBA), Tony Elumelu, has expressed concern over Nigeria’s oil production which he said has been on a downward trajectory, falling from peaks of over 2 million barrels per day to recent lows, below 1.5 million.
Elumelu said it has become increasingly clear that collaboration between international oil companies, IOCs with indigenous firms will in some form address some of the gaps.
Elumelu, whom stated this during the 3rd anniversary of Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in Abuja, said, “firms, such as Heirs Energies, that have taken your traditions of best practice and global standards and integrated them into proudly indegenious capabilities, and others, are truly capacitized partners.
“By combining your global expertise with our local knowledge and commitment, we can drive innovation and excellence across the entire value chain, effectively addressing the challenges we face.
“The private sector has the power to transform the continent through long-term investments, but it must work collaboratively with the public sector.”
On the theme of the programme— ‘Transformation, Innovation & Excellence,’ Elumelu said it resonates with the challenges and opportunities facing Nigeria’s energy space.
He said the challenges threaten the nation’s economy which is heavily dependent on oil, calling for sustainable solutions to save Nigeria’s inheritance.
On oil production decline he said, “This decline translates to lost revenues, reduced global market share, and missed opportunities for national development. The root causes are multifaceted: aging infrastructure, security challenges in the Niger Delta, stalled investments, regulatory uncertainties, and a global shift towards renewable energy that has compounded the investment challenge,” the economist said.
Commending the NUPRC for the Project 1 million barrel of oil (1MMBOPD) launch, Elumelu said the initiative is a crucial part of the solution to unlocking the next phase of development in the sector.
“By targeting to grow production by 1 million barrels of oil per day from current levels, we are setting a clear and challenging goal; one that I believe is achievable as I see all stakeholders are at the table and will commit to play their parts and bring the needed collaboration, innovation, and excellence to make this project a success, for the benefit of our country.
“To be sustainable, this initiative should go beyond just increasing production; it should catalyse a comprehensive strategy to revitalize our entire upstream sector.”
He highlighted his expectation for the project as infrastructural modernisation to upgrade aging facilities, security enhancement, regulatory streamlining, embracing cutting-edge technologies to optimise production and reduce environmental impact.
“By addressing these areas comprehensively, we will not only aim to reach the 1MMBOPD target but also to create a sustainable framework for future growth,” he stated.
Elumelu also lauded the NUPRC’s leadership for its efforts in the Nigerian Gas Flare Commercialisation Programme, which has brought the innovation required to balance environmental stewardship with economic growth.
Stressing the need to focus more on gas, the renowned investor said the path to 1MMBOPD must be constructed on strategies that maximise the value of gas resources to reduce flaring, rather increase utilization for domestic and export markets.
His words, “the dual focus will help diversify our energy portfolio and mitigate the risks associated with over-reliance on oil.
“We know the criticality of gas in improving access to electricity in Nigeria. Access to electricity is the single most important factor in our quest for industrialisation. You can now see that our oil and gas sector is pivotal to the development of our country.”
He hinted that Heirs Energies is working on increasing its gas production to meet the current energy needs and feed many power generation plants and gas-based industries.
Highlighting the works of Heirs Energies and its role in the growth of the oil sector, Elumelu stated that despite the setback encountered in the industry, the company presently records a remarkable improvement.
“In the first 100 days after we took over operational control of our OML-17 asset in 2021, we doubled our production from 28,000 to over 50,000 barrels per day.
“We suffered a setback with unabated crude theft, which caused us to shut-in and work collaboratively with the NNPC Limited to better secure the pipeline system. From a low of 5 per cent terminal receipts in December 2021, year-to-date in 2024, we have recorded an average terminal receipt of 85%; a remarkable improvement and a good example of what a purposeful collaboration between NNPCL and operators underpinned by rigorous execution can deliver.
“With the improvement in the operating environment, we have restarted our investment and production growth journey, and have now successfully reversed the fall in production that we suffered in 2022 and 2023, as a consequence of the evacuation challenges. A few days ago, OML-17 attained over 51,000 barrels per day, and we continue our production growth journey.
“These achievements indicate what is possible, where there is a strong industry collaboration, and in particular, when regulatory support meets private sector drive and innovation.”