Nigeria aims for cost efficiency, safety, value in oil sector with centre of excellence

 By Tobias Pius

• President Buhari launches NOGEC Thursday
• To host 6 sub-industry centres – SeRAS, CCC, NIORC, DRC, CDC, IDMAC

Nigeria’s Department of Petroleum Resources, (DPR), as part of efforts to boost the operations of the country’s petroleum industry and drive down the cost of oil and gas production, has disclosed that a National Oil and Gas Excellence Centre (NOGEC) will be inaugurated on January 21, 2021, which aim is to pursue the three-pronged objectives of cost efficiency, safety, and value in the nation’s petroleum industry in order to produce a cost-efficient oil sector.

Paul Osu, head, public affairs, DPR, said in a statement that the inauguration will be carried out by President Muhammadu Buhari virtually, adding that the centre, situated in Lagos, Nigeria’s financial and business capital, will be structured to house the various flagship centres of the industry and comprehensively aid in covering key areas.

The flagship centres include Search, Rescue and Surveillance (SeRAS), Command and Control Centre, and National Improved Oil Recovery Centre (NIORC). Also included will be the Oil and Gas Dispute Resolution Centre (DRC), Oil and Gas Competence Development Centre (CDC) and Integrated Data Mining and Analytics Centre (IDMAC).

The highlighted objectives of this centre – cost efficiency, safety, and value – are very vital for Nigeria’s oil and gas industry’s growth, stability, and sustainability and will afford the Nigerian oil and gas industry crucial elements that will offer a competitive advantage in a changing global energy landscape.

Meanwhile, the flagship centres in the NOGEC, such as SeRAS, which is an industry-wide programme, is expected to play a part in enhancing safety management, emergency preparedness and response, as well as logistics services across the petroleum industry.

Sarki Auwalu, director, DPR, commenting on the launch, said: “The integrated centre will also entrench Nigeria’s status as a regional leader and position the nation for significant global impact in the provision of value-added services and breakthrough solutions for the industry in years and decades to come.

“SeRAS will entrench safe practices, drive cost reduction and improve operational efficiency across the industry. The SeRAS Command and Control Centre (CCC), established at the NOGEC Centre, Lagos, while two other Rescue Coordination Centres (RCC) will be set up at Osubi and Brass, in the first instance, for effective coverage of areas of operations,” Auwalu further explained.

Explaining the roles of the flagship centres in the NOGEC, Auwalu stated that SeRAS, an industry-wide programme, was established to enhance safety management, emergency preparedness and response as well as bed space management and logistics services across the petroleum industry.

The NIORC upon its establishment under the complex will come in handy in creating formulation and implementation strategies to improve and enhance oil recovery methods in the oil and gas industry with the sole aim of achieving maximum production at the lowest possible cost.

The DPR director further reiterated that the oil and gas DRC would offer arbitration, mediation and conciliation services for the industry, adding that the centre would leverage industry technical experts, alternative dispute resolution practitioners and resources of the National Data Repository, to provide fair and balanced resolutions of industry-related disputes from an informed position.

“The DRC is structured to adequately resolve disputes in a manner consistent with regulatory and commercial interests of the industry. The centre will partner with operators and technology innovators in their research and development efforts for achieving its objectives. It will also collaborate with similar international oil and gas regulators in sharing lessons learnt and operational best practices. NIORC will focus on the implementation of a robust national IOR framework to enable the country to optimise its resources as well as create greater opportunities for operators,” Auwalu said.

He explained that this will address sub-optimal development of oil and gas assets associated with lingering disputes and the attendant consequences of value erosion in terms of national resource growth, global competitiveness, investment attractiveness, government take and investor’s profitability.

Auwalu also added that the Oil and Gas CDC, as a center of world class excellence, would serve as the innovation hub for the oil and gas industry in Nigeria, and even beyond.

He said: “The centre will feature state-of the-art training facilities, meeting rooms, conferencing, electronic library, digital visualisation centre, and co-working spaces designed to stimulate creative thinking to proffer solutions for the technical and business challenges facing energy sector practitioners.

“The CDC is set up to be a regional hub to deliver trainings for oil and gas industry practitioners. The centre will significantly reduce the cost of training and capacity building which is often associated with international travels by utilising both local and international subject matter experts (SME) to deliver world-class training in-country,” further stated.

It is also expected that the center will leverage the National Data Repository NDR and its robust suite of digital solutions and other real time e-services to deliver hands on practical solutions to industry challenges

Based on official statistics, Nigeria is one of the oil producing countries that has the highest oil industry production cost. For instance, it cost Nigeria an average of about $17 to produce a barrel of crude oil, compared to $8.38 in Saudi Arabia; $9.08 in Iran, and $10.57 in Iraq.