Lokpobiri’s Persistence Pays Off: $400m Otakikpo Oil Terminal Deal Signed – By Freston Akpor

By Freston Akpor

The Nigeria energy sector particularly the oil sub-sector has in recent months been in the media space and public sphere for all the positive reasons. Seeming challenges arising from the fuel subsidy removal, high cost of protecting critical infrastructure in the sector and global oil price volatility among other things are ordinarily, considered a news treasure trove for any news media but rather, more positive news from the sector got news editors’ attention.

PENGASSAN, the trade union for senior and middle-level staff in the oil and gas industry attempt to ruffle the downstream sector in the face-off with Dangote Oil Refinery turned out to be an insignificant irritation which was timely nipped in the bud.⁰p

In all, the Tinubu administration has come out smelling like roses and therefore deserves a pat on the back for showing capacity in managing the sector, without the usual crises associated with the industry prior to May 29, 2023. The fuel subsidy removal and the various policy initiatives which followed in its wake are like elixir to encourage private sector participation in both the upstream and downstream sectors of the petroleum industry.

The recent inauguration of the four hundred million dollars Okakikpo Oil Terminal is one of the numerous outcomes from the administration’s numerous initiatives aimed at driving the process to grow, sustain and strengthen Nigeria’s energy sector, which is also the country’s economic mainstay. The Honourable Minister of State Petroleum Resources (Oil) Senator Heineken Lokpobiri, PhD stood in for President Bola Ahmed Tinubu who flagged off the Okakikpo project, the first indigenous oil terminal located in the oceanic area of Ikuru-Town in Andoni, the eastern-most part of Rivers State. The choice of Otakikpo-Ikuru for the oil terminal project, is strategic and not necessarily for its rich biodiversity as Andoni is known as home to the large African forest elephant, the pigmy hippopotamus, manatee or sea cow and a wide range of rare species of both land and aquatic mammals and large migratory avian populations, but rather to open new corridors to allow for the expansion of Nigeria’s crude oil export channels.

The significance of the Otakikpo project to Nigeria’s energy sector is quite apparent. By design it will impact positively on the sector as oil terminals everywhere play critical roles in the global energy supply chain by facilitating the storage of hydrocarbons, In addition to serving as crucial hubs for managing supply, they also ensure energy security by stockpiling petroleum and associated products in case of potential disruptions.

The oil terminals are also strategic in handling import and export of products making them central points for transferring oil products using different modes of transportation including loading and unloading marine tankers and connecting to pipeline networks, from production sites to refineries and to end-users through different modes of delivery.

From the last check, Nigeria’s major crude oil export terminals are located in Bonny, Brass, Escravos, Forcados, Qua Iboe and Pennington. The terminals are operated by International Oil Companies (IOCs) like the Shell Petroleum Development Company, Nigeria Agip Oil Company, Chevron, and ExxonMobil and Texaco (some of the IOCs have divested their onshore interests with name change to reflect the new status). Although the country also has other terminals for crude oil export at offshore locations, the inauguration of Nigeria’s first indigenous onshore terminal provides an alternative export capacity route to reduce over-reliance on existing terminals owned and operated by the IOCs.

The Otakikpo Oil Terminal is a product of the ongoing reforms by the Tinubu administration which the Honourable Minister of State for Petroleum Resources, Senator Heineken Lokpobiri is steering to safe harbour. The reforms are intentional and deliberate as President Tinubu through the Honourable Minister of State proposes to expand Nigeria’s oil production capacity from one point eight million barrels per day to two million towards achieving sustainable economic growth.

The new onshore oil terminal has a storage capacity of seven hundred and fifty thousand barrels which can be expanded to three million barrels. It also has a pumping capacity of three hundred and sixty thousand barrels per day. Interestingly, business has already kicked off at the terminal since June this year and four export operations totalling one million barrels of crude oil have been completed.

The uniqueness of the project and why Nigerians are celebrating the Otakikpo Oil Terminal is because it is the first wholly indigenous facility owned by Green Energy International Limited (GEIL) with Lekoil as a partner. The facility is novel and it is already complementing operations at the Bonny terminal which has a total crude oil storage capacity of twelve million barrels making it the biggest terminal in the country. Brass has a storage capacity of three point five million barrels, Escravos- two point six million barrels storage facility, Forcados- six point three million barrels and Qua Iboe with four point five million barrels across its nine crude oil storage tanks. In addition to these are also various floating storage facilities dotting different offshore locations.

Every and any addition to the existing oil terminals either onshore or offshore will be a win-win for the country’s economy and this probably informed the decision of President Tinubu through the Honourable Minister of Petroleum Resources (Oil) at the inauguration of the Otakikpo four hundred million dollars oil terminal celebrated the management of Green Energy International Limited for making a dream come true having started from a marginal field alongside other awardees “who spent their finances on private jets”. Having added value to the industry, President Tinubu assured (GEIL) and similar operators that are keeping faith in the terms of their licenses of the Federal Government’s support and partnership in line with policy objectives.

The four hundred million dollars Otakikpo Oil Terminal is historic on two levels which Gbenga Komolafe, Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission said, first is the expansion of the country’s crude export infrastructure and a demonstration of capacity by indigenous operators to deliver world class projects which was once viewed as feats only achievable by IOCs. Secondly, the project is also significant at the level of playing a key role in the present national crude oil production initiative of about one point eight million barrels per day. The figure mirrors an improvement and efficiency in production and evacuation of crude which requires an equally effective storage and export process.

The success story of Otakikpo Oil Terminal is a wake-up call for indigenous entrepreneurs to explore numerous opportunities in the upstream sector of the petroleum industry which have been made attractive through policy initiatives by the President through Senator Heineken Lokpobiri, Minister of State for Petroleum Resources (Oil). The initiatives are aimed at encouraging investor confidence in the Nigerian economy. Flagging off of the terminal also re-echoes the calls by the Tinubu administration for Nigerians in the diaspora to come home to invest. To further reaffirm the seriousness the administration attaches to growing the petroleum upstream sector, President Tinubu announced the conception of the African Energy Bank which the Minister of State said “is ready to go” and Nigeria as host has met its obligations. This is a welcome initiative to check the challenges associated with access to finance by potential investors.

The Otakikpo Oil Terminal is a Nigerian initiative and must be owned by Nigerians for the reason that it is a symbol of progress and pride, a show of capacity and credibility, a commitment towards national development and determination by homegrown industry players to deliver value on a global scale. With the imminent resumption of oil operations in Ogoniland and the commitment of the Tinubu administration to resolve the Ogoni problem, Otakikpo becomes the best terminal to evacuate crude oil out of Ogoniland owing to convenience of proximity since Ogoniland and Andoni as ancestral neighbours, who share a common boundary. Otakikpo as an evacuation choice of crude from Ogoniland is apt due to what industry players refer to as efficiency of evacuation and export. Otakikpo will in addition reduce the over reliance on existing onshore terminals which are currently operating at near capacity and more so, their locations are exposed to security and pipeline infrastructure challenges.

While host communities and other stakeholders expect life changing experiences from the Otakikpo project, the people of Ikuru Town and Andoni must take personal pride in owning the facility as landlords in the same manner they have protected and preserved those wildlife and nature unique to the area. The Otakikpo oil terminal will change lives positively and also expand the frontiers of socio-economic growth beyond Andoni and Rivers State. This is the more reason why Ogoni leaders and people should accept the peace moves by the Tinubu government for the good of the nation. This becomes very imperative because as the crude remains underground and not extracted, that rich resource would be of no benefit to both the Federal Government and the people of Ogoni.

Nigerians need to appreciate President Tinubu for the Renewed Hope Agenda initiatives in the upstream and downstream sectors of the petroleum industry and his choice of Senator Heineken Lokpobiri as Minister of State Petroleum (Oil) who has displayed rare capacity in ensuring that both sectors have performed beyond expectations, and the four hundred million dollars Otakikpo Oil Terminal is not just “A dream come true” but also the beginning of greater things to emerge.