Minister of State for Petroleum Resources, and Group Managing Director, Nigerian National Petroleum Corporation, NNPC, Dr. Ibe Kachikwu said at the opening of the 2016 edition of the Offshore Technology Conference, OTC, that he finds that procurement is the biggest headache they have when it comes to the oil and gas production chain in Nigeria.
The conference which kicked off on Monday, at the Reliant Park in Houston, Texas, United States of America was attended by many of the top officials in the oil and gas industry.
Kachikwu who was represented by Mr. Saidu Mohammed, Group Executive Director, Gas and Power, NNPC, talked about the need and importance of Nigeria localizing its oil and gas industry. According to him, this is the only way to achieve optimal results.
He said “Under Petroleum Technology Association of Nigeria, PETAN, a lot is going on and it is always towards the programme we have mapped for ourselves. Nigeria has to domesticate what we do in the oil and gas industry, starting with engineering, procurement and construction.
“We have got the first part of it, as substantial part of the engineering today is being done in the country. Substantial part of construction cannot be done elsewhere except in Nigeria. But procurement has been a headache.”
Kachikwu also talked about the need to look inward in reducing the cost of production and to stay afloat.
“With the capacity building in Nigerian entrepreneurship going on today, with the sub-letting of so many of the equipment we need in the oil and gas industry, of course, Nigeria is going in the right path. Agreed that so many things are happening in the oil and gas industry, particularly with dwindling oil prices; nevertheless, what does it call for?
“It calls for us to look inwards so as to optimise costs, reduce the cost of production so as to remain afloat. However, we cannot reduce the cost of production if we don’t have Nigerian expertise in the development of procurement materials. That is really why we need to commend PETAN members in that regard.
“You optimize your cost when you are in difficulties. At the end of the day, there is a bottom line. What do you use, what are the inputs in terms of production? You look at the inputs and then apart from the human beings, you need machinery. How can you lower the cost of those inputs – the machinery, the chemicals that you use day and night?”
He stated that the only way to reduce costs was to produce locally. He also reiterated his desire that the oil and gas industry in Nigeria be run by Nigerians and the need for PETAN members to be cohesive, focused and determined.