INTERVIEW WITH EGBOGAH
Changing the
game plan
A legend in the Nigerian oil and gas Industry, Emmanuel Egbogah is also a world-renowned reformer of the business. His eight-year stint in the Malaysian national oil company, PETRONAS, as Technical Advisor and Technology Custodian, has become a reference point on how to grow a government owned establishment into a world-class corporation. Under his watch, Egbogah ensured PETRONAS was not just confined to national oil business, but was transformed into an international oil company with interests in many countries in the world. An internationally recognised authority in the fields of petroleum policy and strategy, Egbogah is well versed in improving oil recovery process, stimulation and multi-disciplinary team approach to field development planning and reservoir management. He spent time in Libya doing what he loves best: planning and supervising the enhanced oil recovery programmes of 34 Libyan reservoirs. He was also responsible for the Reservoir Management of 159 reservoirs containing about 40 billion barrels of oil reserves. Prior to this feat, he worked in Canada as Petroleum Engineering Manager and Enhanced Oil Recovery Specialist for Amerigo International in Calgary; Vice-President, International Production, Niko Resources and Senior Vice-President, Engineering with Applied Geosciences and Technology Consultants in Calgary, Canada. Such solid credentials no doubt contributed to his appointment as Special Adviser to the President on Petroleum Matters. Besides advising the President on policies that shape the industry, Egbogah serves as the arrowhead of the oil and gas Industry reforms in the country. In this interview with Yemi Adeyemi and Elkanah Chawai, Dr Egbogah, takes a critical look at the Nigerian oil and gas industry while unveiling current efforts by federal government to promote development in the industry. Excerpts. It has been 55 years of commercial oil and gas production in Nigeria. How has the industry fared when compared to others around the world? One of the most remarkable achievements of Nigeria’s oil industry is the pace at which it grew in production capacity. From a modest 5,000 barrels per day in 1958, Nigeria’s oil production capacity has been on a steady increase, reaching the current rate of about 2.6 million barrels per day. Currently, Nigeria is the 12th largest oil producer in the world, 8th largest exporter and the 6th amongst OPEC member countries. Nigeria’s membership of OPEC together with the increasing oil production capacity has provided the opportunity for the country to play a key role in the global oil demand and supply balance. As with other hydrocarbon resource-rich developing countries, the oil and gas industry is the backbone of Nigeria’s economic and social development, accounting for 20 – 30 percent of gross domestic product, 80 percent of government revenues and 95 percent of foreign exchange earnings. Nigeria’s aspiration of becoming one of the top twenty economies by the year 2020 is anchored on the oil and gas industry and its efficient management. Another remarkable achievement is the
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NLNG - The Magazine
growth and rapid expansion of the export gas sector. Following several years of very low gas utilisation, the gas sector has witnessed tremendous growth in the last few years thereby allowing Nigeria to take advantage of the rapidly growing international and regional gas markets. The facts are there for all to see. The Nigerian LNG (NLNG) is one of the world’s fastest growing LNG facilities, expanding rapidly to six trains since the first train came into operation in 1999. The 7th train is awaiting Final Investment Decision. The Brass and OKLNG facilities, when completed, will add additional LNG capacity for export. Nigeria is, therefore, on track to becoming the 2nd fastest growing LNG supplier in the world, next to Qatar. On a regional front, Nigeria is well positioned and ready to supply gas to the West African sub-region up to Ghana. The West African Gas Pipeline project which was conceived with the objective of delivering Nigerian gas to the West African sub-region has since been completed. At full capacity, the pipeline will deliver up to 470 million standard cubic feet per day. Nigeria’s successful entry into the deepwater arena marked a watershed in the history of the oil industry. Today, a number of deepwater projects are in production, currently
contributing about 30 percent of Nigeria’s crude oil production. Many more deepwater projects are awaiting investment decisions. Shell’s Bonga and Chevron’s Agbami FPSOs are among the largest of their kind in the world employing the latest in deepwater production technology. However, despite this growth of the oil and gas industry in Nigeria, it has not developed as much as others around the world which started about the same time, for example, Malaysia whose oil and gas industry is currently among the best in the world. The reasons for this slow pace include, first and fore most, lack of funding. Over the years, government has had difficulty meeting its cash call obligations to the joint venture companies, in the face of increasing cost of operating the industry. This has consequently negatively impacted on capital expenditure requirements for increasing production levels from the existing joint venture fields. Secondly, the governance structure of the public sector and the regulatory framework for the industry have not allowed for clarity of roles and transparency in the operation of the industry. This is perhaps the biggest challenge facing the industry today and for which reason the government is seeking to reform it.