The Nigerian Petroleum Development Company (NPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC) has said that the shortfall in gas supply for power generation is caused by militancy.
NNPC, in a statement in Abuja on Sunday said the shortfall affected both NPDC and Joint Venture (JV) partners.
JV partnership is an arrangement that Nigeria has with international oil companies to ensure steady supply of petroleum products into the country.
In a presentation to the House Committee on Local Content, NPDC Managing Director, Mr Yusuf Matashi, said ”the pulverization of the Forcados trunk line by militants in 2016 gravely impacted gas production by NPDC and its JV partners.
”The attack, which primarily led to a loss of about 70 per cent of NPDC’s crude oil production capability, also had an effect on gas production.
”Unfortunately gas production in the region we operate is not non-associated gas but associated with the crude oil we produce so by the time we shut in the oil well, we also shut in most of the gas.
”That is why we now see the level of gas supply shortage for power generation,’’ Matashi said.
He said other operators might have other reasons for the shortfall in gas supply in their domain.
According to him the damage of the Forcados export terminal supply line is the biggest obstacle to the production of gas by the NPDC and its JV Partners.
Matashi, however, said the Company would increase its gas production by as much as 50 per cent whenever the Forcados line was back on stream.
Describing the impact of the attack as immeasurable, Matashi said within the last one year, the company had struggled to mitigate the effects on its production.
On the NPDC local content compliance level, Matashi noted that as an indigenous exploration and production company, the NPDC was in sync with the letters and spirit of the provisions of the Nigerian Content law in the oil and gas industry.
The Chairman of the House Committee on Local Content, Rep. Emmanuel Ekon, said members of the Committee would in due course embark on an oversight visit to NPDC facilities.
He said this would enable them have proper appraisal of the company’s compliance level with the extant law on local content.
The Minister of State for Petroleum, Dr Ibe Kachikwu, had said but for some ”minor incidents” the nation would be closer to producing 2.1 or 2.2 million barrels per day and had set a zero militancy target for 2017