Operators in Nigeria’s oil and gas sector have identified evacuation bottlenecks as a major obstacle to achieving the Federal Government’s target of three million barrels of crude oil production per day.
Indigenous energy firm, Green Energy International Limited, has declared that the industry’s soaring crude oil production costs are poised to drop by at least 40 per cent, following the completion of its state-of-the-art onshore crude oil export terminal at Otakikpo, Rivers State.
It said this would be achieved by eliminating evacuation bottlenecks, which have been identified as a major hurdle to the Federal Government’s target of producing three million barrels of crude oil per day.
The company, which operates the Otakikpo Marginal Field under Oil Mining Lease 11, recently unveiled a groundbreaking crude storage and evacuation terminal, a strategic infrastructure expected to drive a decisive shift toward cost-efficiency and national energy self-reliance.
It said the facility, equipped with an initial storage capacity of 750,000 barrels, expandable to three million barrels, and a loading capacity of 360,000 barrels per day, would add a significant capacity to the Federal Government’s objective to produce 2.06 million barrels per day.
Nigeria spends not less than N1.57tn on crude oil production monthly, translating to about N18tn annually, a development which industry operators described as too high, The PUNCH reports.
Data collected from different sources, including the Nigerian Upstream Petroleum Regulatory Commission, indicated that the minimum amount any oil producer spends in extracting a barrel of crude oil in Nigeria is about $25.
It was gathered that the cost of crude production ranges between $25 and $40 in Nigeria, an amount considered too high when compared with other oil-producing nations like Saudi Arabia, where the cost is around $10 per barrel.
But in a statement issued on Thursday, the Managing Director of the Otakikpo Oil Terminal, Kayode Adegbulugbe, said the facility would serve as a cost-saving solution to challenges facing many oil producers, especially marginal field operators whose wells remain idle due to the lack of evacuation infrastructure.
Speaking during the launch of the facility in Port-Harcourt, Adegbulugbe likened the cost-saving potential of the terminal to carpooling.
“If you stay in Lagos and drive your own car to work every day, you spend more. But once you decide to carpool, you start saving. This is exactly what this facility brings to the market. It provides an option to store crude and eliminates evacuation challenges,” he said.
According to him, the new terminal will drastically lower capital and operational expenditures, allowing producers to store crude locally without relying on distant or expensive floating production systems.
“The government needs to realise that instead of spending on multiple float stations, this facility offers a home-grown alternative. When oil is stored in tanks, it lowers the cost of production per barrel significantly. The operational expenditure is also set to reduce when they are stored in tanks, and the cost of production per barrel will reduce. This facility will ensure that the costs will drop by at least 40 per cent,” he added.
The project, which has been under development for over two years and delivered ahead of schedule, was described as a feat of indigenous engineering, with more than 90 per cent of the contracts executed by local contractors.
The board chairman of Green Energy, Professor Anthony Adegbulugbe, said the terminal represents a significant milestone in Nigeria’s energy independence drive.
“This is the first onshore crude oil terminal built by an indigenous operator. All other terminals of this kind have been constructed by international oil companies,” he said.
He noted that a key feature of the terminal is its adaptability and accessibility from various routes, by truck, barge, sea, and pipeline, giving it a unique logistical advantage over existing facilities.
“What we have achieved here is not just a storage solution, but a game-changing national infrastructure that has opened a new pathway for about 40 stranded oil fields to finally contribute to the economy,” he said.
According to him, the civil works were handled by the King of Ikuru Town, the Okama of Ikuru, who mobilised local artisans to support construction efforts. He also acknowledged the role of West African Ventures, a Nigerian marine firm, for its offshore technical expertise.
Adegbulugbe also praised the local community and technical partners for their role in delivering the project under extremely difficult conditions. He also called for strategic partnerships with key stakeholders across the oil and gas value chain to maximise the full potential of the facility and drive sustainable growth.
“The last 24 months have been tough. We laid pipes under adverse weather, with 24 to 25 days of delay at times while paying $250,000 per day in standby rates. Several barges sank. What was scheduled for 14 days took six months. But not once did our contractors back out. Together, we weathered the storm and delivered,” he added.
The statement added that a facility tour was conducted for prospective clients, government officials, and members of the Independent Petroleum Producers Group.
Green Energy said the terminal would also contribute to the elimination of gas flaring in the region, further supporting Nigeria’s energy transition goals.
“We are local and we are flexible,” Adegbulugbe said. “No other terminal in Nigeria has this level of logistical access. This project shows what Nigerian companies can achieve with resilience and vision.”
Commenting on the development, IPPG Executive Coordinator, Oyeleke Banmeke, expressed strong approval of the project, describing it as a critical boost to Nigeria’s energy infrastructure.
