CEDA reviews role of reforms in diversification of economy and surge in non-oil revenues    79 hospitality facilities in Makkah and Madinah face penalties for closure order violations    Saudi Arabia hosts large-scale iftar banquets in Indonesia, Kyrgyzstan, and Malaysia    Saudi Arabia records 23,865 violations in nationwide residency and labor law inspections    S&P upgrades Saudi Arabia's credit rating to A+    Trump orders 'decisive' military action against Houthis in Yemen    US Senate passes Republican spending bill to avert government shutdown    Zelenskyy says territorial control key to peace talks, rejects recognition of occupied regions    Pakistan says train hijacking death toll rises to 30, accuses India and Afghanistan of supporting militants    Al Nassr climbs to third with dominant win over Al Khaleej, Al Qadsiah slips after loss to Damac    Power bank likely caused South Korea plane fire, investigators say    Makkah Lanterns Festival returns for the eighth year as part of Ramadan activities    Crown Prince receives Yazeed Al-Rajhi after historic Dakar Rally 2025 victory    SR17 million fines slapped on 16 individuals and companies convicted of violating Capital Market Law    Saleh Al-Shehri's late penalty rescues Al Ittihad against Al Riyadh    Grand Mufti rules against posting prayers and preaching in mosques on social media    Man lives for 100 days with titanium heart in successful new trial    Argentinian court begins trial of seven healthcare professionals over Maradona's death    Singer Wheesung who wooed Korea with his ballads, found dead at 43    Prince Frederik of Luxembourg dies from rare disease    Real-life shipwreck story wins major book award    King Salman prays for peace and stability for Palestinians in Ramadan message King reaffirms Saudi Arabia's commitment to serving the Two Holy Mosques and pilgrims    Bollywood star Saif Ali Khan 'out of danger' after attack at home in Mumbai    Order vs. Morality: Lessons from New York's 1977 Blackout    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Nigeria risks long term oil decline
Published in The Saudi Gazette on 24 - 03 - 2012


Christopher Johnson
Reuters
Nigeria's oil production will begin falling soon unless the government can reduce political uncertainty, corruption and criminality.
Rising output of Nigeria's high grade crude, highly prized by competing US and Chinese buyers, could stall and even sharply reverse, shattering the ambitious development plans of Africa's most populous nation.
Oil output from ageing onshore fields in the Niger Delta is declining, data analysed by Reuters shows, and while deep offshore production has been steadily increasing over the last decade, it is set to plateau due to a lack of new projects.
Energy consultants Wood Mackenzie forecast Nigeria's oil production could drop by 20 percent by 2020.
“Nigerian oil production from currently commercial projects will be steady until around 2015/2016 but then will drop off sharply unless investment increases,” said Gail Anderson, Africa analyst at Wood Mackenzie. “The consequences of fiscal uncertainty, inefficiency, bureaucracy, the time taken getting decisions made, will all take their toll.”
Nigeria produces an average of around 2.5 million barrels per day (bpd) of oil and light gas liquids and has the world's seventh largest gas reserves, which due to mismanagement are largely untapped.
Reuters' data show that while Nigerian oil production from onshore or shallow inshore fields has declined over the last five years, output from offshore and deep-water fields has barely made up for the decline. Much of the vast offshore potential has not been realised, despite early optimism.
Nigeria's oil and gas earnings were growing at double-digits a decade ago but they have been volatile in recent years and shrank by 0.57 percent last year, data from the National Bureau of Statistics seen by Reuters showed this month.
The ambitious Petroleum Industry Bill (PIB) to overhaul everything from fiscal terms on projects to the state oil company, has been blocked by political wrangling for five years.
During that time, oil majors say they have largely stopped investing in big new exploration projects because they have no idea what it might end up costing them.
Widespread corruption and risks associated with oil theft and piracy are also making investing less attractive.
Despite deterrents, foreign oil majors seem keen to cling onto producing oil blocks they already own.
Exxon agreed a 20-year renewal of its onshore oil licences last month and Shell, Chevron and Eni are lobbying the government to sign-off on theirs — a sign they are still keen to maintain their existing investments in Nigeria, even if they aren't making many new ones.
With prices at $125 a barrel there would be huge interest in more offshore exploration, if the investment framework was clarified.
The major exploration onshore has already taken place and the potential there is likely to be left to smaller Nigerian players, rather than foreign firms, especially since a law that favours indigenous operators was passed last year.
The PIB should set out the terms for long-term investment and pave the way for a fresh offshore licensing round, which could uncover billions of barrels of oil.
It is supposed to break up the state-oil company, NNPC, whose funding shortfalls in joint ventures have also been a major brake on progress. So many targets for passing the legislation have been missed that investors are disillusioned.
“We have very little reason to be optimistic about progress on the PIB. Momentum has stalled,” a strategist at a major European oil company said, asking not to be identified.
The high price of oil means politicians are under little pressure while the revenue stream remains so robust. High returns are also encouraging industrial scale theft in the vast wetlands of the Niger Delta, rising in the last six months. Foreign oil firms estimate around 150,000 bpd is stolen. __


Clic here to read the story from its source.