Minister of State Petroleum Resources (Oil), Senator Heineken Lokpobiri has said despite the achievements in the oil and gas industry, road transport, tank operations, evacuation systems are increasing costs and affecting supply chain.
Besides, he said global oil prices, market volatility, exchange rate, product prices have raised uncertainty in the market.
Recall there has been a spike in the cost of petroleum products across the country.
He spoke in Abuja during the Petroleum Technology Development Fund (PTDF) Journal Summit yesterday.
The Theme of the summit was: ‘Private Sector Participation in Nigeria’s Midstream and Downstream Petroleum Sector: Prospects, Challenges and the Way Forward’
Lokpobiri who was represented by the Technical Adviser, Engr Emmanuel Sinime, said: ‘Another key challenge is logistical transportation, which of course includes road transport, tank operations, evacuation systems, which of course are raising costs and disrupting supply chain.
‘Market volatility, global oil prices, exchange rate, freight costs, and product prices create uncertainties. Investors need risk management tools and stable policies.’
The minister who also listed the massive accomplishments in the petroleum sector said
challenges still remain, and include but not limited to infrastructure deficits, which of course cut across the limited pipelines and storage systems and the need for an evacuation facility.
He stressed that the critical facilities drive up logistics costs and reduce product competitiveness.
According to him, regulatory uncertainties and fiscal issues are equally part of the challenges.
Lokpobiri earlier revealed that ongoing reform in the petroleum sector are therefore designed to restore investors’ confidence, improve regulatory certainty, and create conditions for sustainable private sector investment across the oil and gas value chain.
The minister stressed that as a foundation of this transformation, upstream performance has continued to improve.
He stressed that Nigerian crude oil production has been rising from around 1 million barrels per day in 2023 to over 1.7 million barrels per day, moving closer to 1.8 million barrels per day national target.
According to him, while the numbers of active drilling rigs have grown from about 14 to more than 60, the sector has also recorded more than $10 billion in foreign direct investment (FDI) in recent years, reflecting renewed investor confidence in Nigeria’s upstream industry.
The government, he said, has also made significant progress in the restructuring industry by completing major divestment transactions involving international oil companies.
Lokpobiri said the transactions are creating great opportunities for indigenous operators who now account for more than 50per cent of Nigerian crude oil production, a historic milestone for our industry.
The oil minister said on the midstream and downstream side, specifically, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has introduced a new domestic gas pricing framework to give producers and off-takers greater certainty, and has also begun work on the new regulation to curb anti-competitive practices and ensure fair, non-discriminatory access to pipelines, depots, and terminals.
He recalled that the NMDPRA is also partnering with international commodity analyst providers to develop a West African refined product pricing benchmark, therefore reducing our region’s reliance on external pricing indices.
Projecting into the future, he said Nigeria also needs a predictable, transparent regulatory environment that enables business, attracts investment, creates jobs, and not one that is burdened with assessing regulations and guidelines.
According to him, history will not judge stakeholders by the number of regulations that they issue or guidelines that they actually publish, but that history will judge them by the number of businesses they actually inflate.
Lokpobiri said: ‘The investment that we actually attract, the pieces of light that comes out of these regulations, there must be a balance between the regulations that we bring, and of course, the jobs that these regulations will actually bring to attract.’
Meanwhile, the PTDF Executive Secretary, Prof. Shuaibu Shehu Aliyu has revealed that the fund is currently focusing on the measures to translate the researches in the oil and gas industry into solutions.
The summit extends this role further by transforming ideas beyond the pages of the Journal into dialogue, collaboration, and practical solutions for the industry.
He said the focus of PTDF is ‘how do we translate researches to solutions’.
As an institution dedicated to human-capacity development, research, and innovation, Aliyu said, PTDF is particularly focused on ensuring that research outputs go beyond mere publication and move towards application, intellectual property development, and commercialization.
He said stronger partnerships between industry and research institutions will be critical in achieving this goal.
Aliyu said Nigeria’s petroleum industry is experiencing a substantial transformation, presenting growing opportunities in areas such as exploration, geophysics, refining, gas development, processing, transportation, storage, and distribution.
On the other hand, he stressed that to fully realize these opportunities, stakeholders need not only investment and infrastructure but also the right policies, technical capacity, technology, research, and effective collaboration among government, industry, and academia.
The PTDJ, he said, plays an essential role in today’s Summit and serves as one of the key avenues through which PTDF advances its mandate in research, technology development, and human-capital development.
Aliyu said the Summit extends to transforming ideas beyond the pages of the Journal into dialogue, collaboration, and practical solutions for the industry.
According to him, the growing involvement of private investors in refining, gas processing, logistics, storage, and the distribution of petroleum products present substantial opportunities for economic growth, job creation, technology development, and building local capacity.
He stressed that however, PTDF also confront with challenges related to financing, infrastructure, regulatory certainty, access to technology, market efficiency, and technical capacity, all of which require open and constructive discussion.
Minister of State Petroleum Resources (Gas), Home Ekperikpe Ekpo said through the PTDF investment in education, research training, and human capital development, the Fund is helping to build the technical capabilities required to support a competitive and technology-driven petroleum sector.
He encouraged the PTDF to continue strengthening collaboration with industry operators, universities, and research institutions to ensure that research outcomes translate into practical solutions and commercial opportunities.
He was confident that the deliberation of the summit will generate actionable recommendations for strengthening private sector participation, improving the investment climate, and accelerating the