Can you tell us about your current gas projects and the progress of attracting project funds?
We estimated it would cost us over USD3 billion to develop all our assets at Tubu, Okoro, and IMA fields. We have about 45 million barrels of oil in Tubu, about 45 million barrels of oil in Okoro, and 3.2 trillion cubic feet of gas between Okoro and IMA. We recently went on a roadshow to get companies, financial institutions, and off takers to look at our assets and investment opportunities, where we received a positive response. We have also reached out to banks in Europe and the US, who are currently going through the due diligence process.
Are you currently focusing more on gas than oil?
In Nigeria, we find gas when we are looking for oil; no one has actually gone out looking for gas in this country. It costs the same amount of money to drill a gas well as it does to drill an oil well, and globally the price of oil is perhaps twice or even triple the price of gas. Therefore, I would rather put my money into a 200-million-barrel oil field than a 200 million barrel equivalent of gas. However, more often a gas reservoir has huge yields compared to oil. Most oil projects have a lifetime of five to 10 years; however, for gas it is about 25 years. Given that Nigeria has three to four times more gas than oil, companies such as ours should focus more on gas; in our discovery of gas reserves we should look to harness and monetize the gas as we go along. The government is making a requirement that when looking for oil, companies must find a solution for the gas before they are allowed to produce oil. This is what we have been doing with gas, which is a loss of revenue and also ruins the environment; we have serious pollution in the Niger Delta as a result of gas flaring. In Nigeria, we have power issues because we do not have gas; thus, we need to make sure we monetize the gas while also reducing environmental pollution.
How do IOCs and indigenous companies work together to develop the sector?
I see significant requirement for development in the service sector. Close to 80% of the money we spend in the oil and gas industry goes out of the country; if only 20% stays in the country, that is a fraction of what should stay and therefore not sustainable. We currently spend USD8 billion a year in the operations of oil and gas in Nigeria. If we could develop the service sector and keep 60%, that is USD5 billion, could be kept within the economy. This in turn would increase employment, work transfer skills, technology, and more. However, in the upstream, there is a great deal of cooperation right now between independent indigenous oil and gas companies and the IOCs. It is a symbiotic relationship, where IOCs do not want to lose their assets, and the only people they can get to buy them are indigenous companies. There is a great relationship. In fact, 90% of IOCs are run by locals; therefore, Nigerians are the ones being trained and developed by the IOCs.
What are your expectations in 2018?
I can only talk about the global economy because the Nigerian economy hardly affects our operation. I hope we will be able to stabilize oil prices at between USD50 and USD60 a barrel; if we were to do that, at the least our plans for 2018, which is to reach 50,000bpd, will be achievable. For these three projects, we will be kept extremely busy and 2018 will be a great year for us. We are looking at a few assets that we should be able to acquire that will allow us to look further into 2019 and 2020.