V.A.L.O.R V alue A dded LO cal content R educes cost: Creating a Strategic competitive advantage for Nigeria’s Oil & Gas Industry through stakeholder Collaboration Emeka C. Ene PETAN March 3rd, 2016
“Global Oil Supply > Global Oil Demand” – EIA Short-term Global Energy Outlook 2016
IRANIAN & LIBYAN OIL? Will Geopolitics alone save the situation? SHALE OIL DISRUPTION WEAK GLOBAL ECONOMY
Oil Prices goes beyond the Geopolitics!
Oil#Price#(US$)# [Source:#OPEC]# 120.00# 100.00# 80.00# 60.00# 40.00# 20.00# 0.00# 2004# 2006# 2008# 2010# 2012# 2014# 2016# NIGERIA'EXCESS'CRUDE'ACCOUNT'(ECA)/SWF'(B$)' Source:'World'Bank','IMF,'Nigerian'Govt.' 12" 10" Nigeria? 8" 6" 4" No Savings during 2" the Boom Cycle! 0" 2012" 2013" 2014" 2015" ECA/SWF"(B$)"
Rig-count Middle East | Rig-count Nigeria Source: OPEC
…Resulting in decline in exploration activity, reserves & production! Exploration wells & Discoveries (source: DPR)
“We cannot build an (oil) economy where corruption is the working capital - Muhammadu Buhari ”
“…Industry-wide Collaboration is CRITICAL to rescue the situation”
3-Cs of Collaboration • Cost reduction industry-wide • Capture Value-Added Local Content (not Rent collection) • Cluster to solve industry challenges
Cost reduction should be industry-wide COLLABORATE TO ELIMINATE SYSTEMIC COSTS
DEVELOPMENT FINDING COSTS High COSTS systemic Costs $/BBL INFRASTRUCTURE OPEX COSTS COSTS Source: Jojarth: Estimating Average Production Costs of Oil Fields ; EIA
Capture Value-Added Local Content NOT RENT COLLECTION!
Local Content Value destruction
LOCAL CONTENT @30$ OIL PRICE!
Collaboration between Nigerian companies will reduce project costs Source: Weltek’s Fabrication of a Methanol Skid for Shell’s Bonga deepwater project
PETAN IN NUMBERS ★ Nigerian-based Industry advocacy trade association. ★ 85 Nigerian Oil Service Companies. ★ 250 Technical Services. ★ Employment: 20,000+ ★ Collateral employment:90,000+
Cluster to solve common industry challenges
4 Critical Industry Challenges -SUSTAINING LOW COST OIL PRODUCTION -STRANDED GAS-TO- MARKET -SUFFICIENCY OF PETROLEUM PRODUCTS -SECURITY
Sustainable oil production Value- added local content knowhow retention 20,000+ jobs Source: George Osodi; Delta Nigeria – The Rape of Paradise
Stranded Gas modular gas plants Gas for power Source: George Osodi; Delta Nigeria – The Rape of Paradise
Sufficient petroleum products • modular refineries Gas powered • transport Regional supply security Source: George Osodi; Delta Nigeria – The Rape of Paradise
Security pipeline monitoring technology Eliminate +10% oil losses Source: George Osodi; Delta Nigeria – The Rape of Paradise
• SEPLAT: 300 MMSCF/Day • SEPLAT: 550 MMSCF by 2017 • NDEP: Modular refinery & Gas Stranded Gas plant Solutions • FRONTIER/7E: 120 MMSCF/Day • XENERGI: Only independent Gas fractionating Plant in Nigeria
25,000 bpd modular refinery 12 months - design to commissioning 60 days on-site installation Potential Quick-win in a Low oil price environment!
REAL-TIME PIPELINE MONITORING TECHNOLOGY DEPLOYED IN THE NIGER_DELTA
A reed never becom et an iroko tree by ds eaming African proverb
THANK YOU @eneemeka
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