Insecurity, prolonged cash call problems and the country risk among others may have made the ExxonMobil Corporation not to consider Nigeria for any of the 25 start up projects with which it intend to boost its production by one million barrels per day between 2017 and 2025 globally.
The company recently roll out an aggressive growth plans which include steps to increase earnings by more than 100 percent – to $31 billion by 2025 at 2017 prices – from last year’s adjusted profit of $15 billion, which excluded the impact of U.S. tax reform and impairments
Part of the company’s plans is to increase tight-oil production five-fold from the U.S. Permian Basin and start up 25 projects worldwide. Those start ups will add volumes of more than 1 million oil-equivalent barrels per day.
But oil and gas industry analysts are is of the view that Nigeria may have been excluded from benefitting from such huge investment because of insecurity, and cash call problem and the country risk. All these have conspired to scare away investors who are not sure of making serious returns on their investment.
Enquiry by BusinessDay to find out through ExxonMobil local office in Nigeria, whether any of the 25 proposed start-up projects would be in Nigeria tends to confirm this fears as no satisfactory answer was given to BusinessDay in this respect and was referred to the same press release the company rolled out which contains nothing that has to do with Nigeria.
One the industry operators told BusinessDay that it would take time for any international investors to make any serious investment decision in the country because of the uncertainties associated with oil operations in the country, especially in terms of security.
ExxonMobil Corporation in October 2016 announced the discovery of up to one billion barrels of oil reserves in the Owowo field, offshore Nigeria. Owowo field OML) 139 spans portions of the contract areas of Oil Prospecting License (OPL) 223 and Oil Mining License.
The development is a boost to Nigeria’s efforts to increase her crude oil reserves from the current 36 billion barrels to 40 billion barrels target, which was set for 2010 but could not be achieved as a result of lack of investment in exploratory activities
Andy Olotu, former managing director of Schlumberger in Nigeria told BusinessDay the problem of cash call which led to prolong explorations inactivity in upstream sector of the oil and gas industry may also be one of the reasons why Nigeria may not have feature in the projects
He said international investors rank the projects they want to do, taking into consideration the country risk and ease of doing business in any countries
Darren W. Woods, chairman and chief executive officer said: “We’ve got the best portfolio of high-quality, high-return investment opportunities that we’ve seen in two decades at the company’s annual meeting of investment analysts at the New York Stock Exchange.
“Our plan takes full advantage of the company’s unique strengths and financial capabilities, using innovation, technology and integration to drive long-term shareholder value and industry-leading returns.”
Woods said this plan projects double-digit rates of return in all three segments of ExxonMobil’s business – upstream, downstream and chemical – which are all three world-class businesses in their own right.
“In the upstream, the company expects to significantly increase earnings through a number of growth initiatives involving low-cost-of-supply investments in U.S. tight oil, deepwater and liquefied natural gas (LNG). Growth coming online from new and existing projects is expected to increase production from 4 million oil-equivalent barrels per day to about 5 million.
Upstream growth he said will benefit from ExxonMobil’s industry-leading exploration success and strategic acquisitions. In 2017 alone, the company added 10 billion oil-equivalent barrels to its resource base in locations including the Permian, Guyana, Mozambique, Papua New Guinea and Brazil.
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