For Nigeria to raise revenue, more oil fields must come on board—W’Mackenzie
Leading global oil and gas research group, Wood Mackenzie has said in its new research published on Friday that Nigerian government risks cash squeeze in nearest future if its major oil fields remain stagnant and unexplored.
Mackenzie Report also warned that three deep offshore fields, which would generate more than $2 billion a year for the government at peak production, are likely to be delayed as companies put their money in regions with better and clearer terms.
According to the report, ‘better and clearer terms’ refer to climes where oil and gas regulations are well spelt out and their Petroleum Industry Law had been tested and working.
Unfortunately, for decades, Nigeria had been finding it hard to deliver a workable Petroleum Industry Bill (PIB) that can pass through all the needed stages at the national assembly and still get presidential assent within record time.
The released report further projected that if strategic efforts are not made to woo credible investors to the sector, Nigeria is going to enter quite a steep decline in production, stressing that “In order to keep its revenue up…it needs to develop additional fields.”
In his further assessment of the scenario, Principal analyst of sub-Saharan Africa upstream with Wood Mackenzie, Lennert Koch argued that “Without the three fields coming on stream, Nigerian production would drop 35per cent within a decade.”
Besides, industry experts, who spoke with Business Hilights correspondent at the just concluded NIPS in Abuja, also agreed in unison that cost increases and uncertainty in Nigeria’s crucial energy sector could lead to a 35per cent decline in oil output over 10 years as companies delay investments in key oilfields due to hanging of the PIB between the executive and national assembly.
