Minister of state for petroleum, Ibe Kachikwu, has said that militancy in the Niger Delta has destabilised the country’s oil industry and that Nigeria needs to up its production by 1.1 million barrels per day to meet target.

Kachikwu also said that declining price of oil in the international market has negatively impacted the country’s revenue leading to economic recession.

Speaking at the annual conference of the National Association of Energy Correspondents (NAEC) in Lagos, the minister painted a gloomy picture of the industry stating that proactive steps were required to bring Nigeria’s economy back on positive track.

According to him, while vandals wreck havoc on oil facilities crippling local production, over supply of product in the market was impeding on prices and thus creating shock to the economy.

Kachikwu said time has therefore come for the country to face the reality of the time as there was no assurances that the prices of oil would  pick up as being speculated.

He hinged his argument on the fact that OPEC merely controls 30 per cent of the market, while 70 per cent is in the hands of major producers like, the US, Russia and Mexico who are non OPEC members.

He noted that the industry was challenged by $6 billion Cash Call indebtedness accumulated over the last 5 years.

Kachikwu said that with inadequate financing of the industry, no investment has occurred in the sector in the last 5 years.

On the impact of militancy in the industry, Kachikwu said the attacks has led to 60 per cent decline of gas production, revealing that between 2010 and 2015, the industry recorded 3,000 incidents.

According to him, 643 million litres of petroleum products amounting to N51,28 billion was lost in 2015, between January to June 2016, 1,600 incidents recorded resulting in a loss of 109 million litres of petroleum products and 560,000 barrels of crude oil to refineries.

Furthermore, he said about 850 million standard cubic feet of gas production has been shut in due to impact of crises and power outage exposure of 2,700 Mega Watts to 3,000 Mega Watts.

Going forward the minister said government was stepping up efforts to make robust policies that would  finalise and gazette a comprehensive gas policy, unlock gas potentials, ensure effective development of Nigerian gas market with adequate and sustainable gas supply to the power and industrial sectors.

He said the policy would also help to transit from gas flare penalty regime to gas commercialisation and shift focus from government built to investor built infrastructure.

Kachikwu said for the industry to rebound, efforts should hinge on developing National Oil,Gas, Downstream, Fiscal Reform policies as well as Petroleum Industry Regime Bill.

Local refineries he added were being scaled up to attain full capacity from present 60 per cent performance such that in 2018, the country would  reduce importation of products and finally cease product import by 2019.

On upstream, the minister said efforts were on to develop 2017 funding requirement to ensure increased national production, develop and implement a detailed deep water development strategy for the country while in the midstream ensure threefold increase in generation capacity with adequate gas supply within 3 years.

He also said that deregulation of the downstream has helped to reduce challenges of petrol smuggling and presently local consumption has reduced to 38 million barrels a day while bridging has come down to 850 trucks per day.