EXPERTS PROJECT GLOOMY OUTLOOK FOR NIGERIA OIL INDUSTRY

Filed in ENERGY by on January 25, 2012

Experts project gloomy outlook for Nigeria oil industry
Wednesday, 25 January 2012 00:00 By Obiora Aduba

A GLOOMY outlook has been forecast for Nigeria’s oil and gas sector in the nearest future, following projections of a continued decline for the industry’s operations, due to a drastic drop in the oil exploration and production activities.

The stakeholders in the petroleum industry, at the ongoing Offshore West African International Conference and Exhibition (OWA 2012) in Abuja, yesterday, expressed dismay over the declining trend of upstream activities in the nation’s petroleum sector, noting that if adequate measures are not taken, the future of Nigeria’s oil and gas sector may be “catastrophic”.

Among the speakers at the event were the Managing Director, Total Exploration and Production Nigeria, Guy Maurice, and the Managing Director of Shell Nigeria Exploration and Production Company Limited (SNEPCO), Chike Onyejekwe, who warned that it is high time government encouraged exploration of the abundant oil resources, in other to guarantee the future of the industry.

Maurice, who was represented by the Executive Director, Corporate Goesciences and Business, Kingsley Ojoh said: “It is important to note that we must explore, if we want to continue from where we stopped. Exploration is the key to this country’s future, it is important for exploration to be encouraged, because there is need for replenishment.

“We were doing over 60 wells post independence, up till 1970 and now there is decline. What is going on is catastrophic. Exploration is going down because those wells you are seen were based on exploration we have done in the past. If we dong start aggressive exploration now, and delaying the decision to put them on stream, we have future that may be jeopardised.

“I don’t want to be the last generation that will experience exploration in Nigeria, there is necessity for the authority to take a decision that will harness instant exploration. There is need to promote aggressive exploration becaus production is cash flow basically, but exploration is the future. Compared to Brazil, Nigeria’s future is not as easy because there has been no reserve replacement.”

However, SNEPCO boss, Onyejekwe, said Shell has done a lot of investments in the industry, as well as pioneering some technologies that have significantly boosted the industry’s performance, but noted that there is need for a stable operating environment.

He said: “We are proud of these initiatives and we would like to do more. But we need a stable environment. The legal, commercial and regulatory frameworks are around and any industry will either be a dampener or an enabler to the growth of that industry and the deepwater cannot be an exception to this rule.

“Investors don’t like uncertainties. They want stable terms and conditions. That’s particularly true in energy, where projects lead time is sometimes 10 years long and facilities operate for decades. Investors need the rule of law and respect for contracts, rules that allow investors to compete fairly in the market. They want good incentives and fair balance risks and rewards.”

According to him, “I believe the Petroleum Industry Bill (PIB) is central to Nigeria and in particular, to deepwater offshore exploration and production activity.

“Recent events suggest that the government is about to redouble efforts at getting the PIB passed. This is good news. An investment friendly bill will enable substantial coordination, will hold immense and enduring benefits for Nigeria, the oil and gas industry and of course Shell.”

The Minister of Petroleum had recently assured that the PIB would be passed “within weeks” after the suspension of the nationwide strike that pervaded the Federal Government’s subsidy removal in the downstream sector.

Available data showed that Nigeria’s oil reserve has dropped to 37.2 billion barrels as at 2011, while experts are skeptical that there might be a further slide in the coming years.

.

Tags: , , , , , , ,

Comments are closed.

Nigerian free classifieds
Forum | Jobs | News | Privacy | Contact: nbf(at)nigerianbestforum.com