Faster divestment, unlocked deepwater assets key to fixing Nigeria’s oil woes, producers say

Nigeria’s petroleum producers are pushing for a swift acceleration of divestment processes and unlocking deepwater assets as steps crucial to unlocking a long-awaited oil boom in the country.

Speaking at the 23rd annual NOG Energy Week in Abuja, Abdulrazaq Isa, chairman of the Independent Petroleum Producers Group (IPPG) said that attracting the level of investment required to fully optimise the country’s production base will require focus on some key priorities in the short to medium term.

“IPPG strongly advocates that our member companies – Seplat, the Renaissance Consortium and Oando – have the proven track record to successfully take over and manage these onshore and shallow water assets to realise incremental production in the region of 100,000 – 200,000 barrels of oil and over 1.5bcf of gas per day within 24 months and well over 500,000 barrels of oil per day in the long term,” Isa said.

He noted that the timely approval of these IOC divestment transactions will also be a clear signal capable of restoring global investor confidence in Nigeria in an era of competing global investment destinations in Africa and very limited access to capital.

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Concerning deepwater development, Isa noted that untangling issues around deepwater development, particularly in terms of competitive fiscal regime being negotiated with Shell, Total Energies, ExxonMobil and Chevron, has the potential to unlock incremental production of 700,000 barrels per day from this terrain in the short to medium term.

“Enabling deepwater development will attract significant economic benefits as Nigeria has one of the world’s largest untapped deepwater resource base,” Isa said at the event.

He noted that Nigeria’s domestic crude oil refining and petrochemical capacity must be sustained primarily from our domestic crude oil and gas production in order to transform our country into a net exporter of refined petroleum and petrochemical products that will lay a strong foundation for the rapid industrialization of the Nigerian economy.

“Nigeria’s vast gas resources must be exploited with immediate focus placed on restoring production to existing installed LNG capacity and expanding production (FLNG). In addition, we must expand domestic gas utilization (Gas-to-Power; Gas-Based Industries) by investing heavily to address the gas infrastructure deficit facing us today,” Isa added.

Isa noted these priority areas provide the most realistic and sustainable pathway towards meeting Nigeria’s national long term production aspiration of 4 million barrels of oil per day and 13 billion cubic feet of gas per day.