Excerpts;
"Last year, stakeholders in the nation’s oil and gas sector said Nigeria’s crude oil reserve would be totally depleted by 2048 if nothing is done to check the dwindling fortune of the hydrocarbon reserves."


UNCERTAIN FUTURE FOR NIGERIA’S OIL

Published on Tuesday, 06 August 2013 Written by Mohammed Shosanya.

The changing global oil market is currently putting the nation’s oil and gas sector on its toes as Nigeria struggles to maintain its hold as the sixth exporter of oil in the world.
Besides, there are fears that the spate of oil discoveries in new oil fields in the world has intimidating implications for Nigeria’s might among exporters of oil in the world.
For instance, countries like Ghana, Liberia, Sierra Leone, Kenya, Uganda and Tanzania have discovered large oil reserves and some have commenced production.
According to reports, large natural gas resources have also been discovered in South Africa, Mozambique offshore, Namibia and Botswana, while discovery in an offshore oilfield in Angola has been marked to make the country the largest oil producer in Africa, ahead of Nigeria.
There are reports that Madagascar, Seychelles, Ethiopia and Somalia  would soon explore oil.
 Israel discovered natural gas reserves off its Mediterranean shores  three years ago while  the United States of America discovered Shale gas which may change its preference for Nigeria’s oil.
Due to this development, US Energy Information Agency (EIA) forecasts the US oil imports to decline to 6mbpd, roughly a third of what it uses, by 2014 as the country moves closer to oil independence by 2035.
According to report, Shale gas production accounts for 46 percent of US natural gas production.
Recent statistics have shown that US crude oil imports from Nigeria dropped to about 330,000bpd from over 1.1mbpd over the fifteen month period to July 2012,  although the Director of Department of Petroleum Resources (DPR) and President of National Association of Petroleum Explorationists (NAPE), Engr. George Osahon, said Nigeria has nothing to fear following the discovery of Shale gas by the US.
According to him, Nigeria could boast of hydrocarbon in big quantity but it is better to exploit the conventional oil in order to remain relevance in the global oil market.
Nigeria’s oil production has however remained stagnant in the last 40 years, a report from ExxonMobil Corporation said recently, adding that the country’s new deepwater production has not buoyed its oil production during the period in review.
The company said in the mid 1970’s, Nigeria’s oil production reached a high of 2 million barrels per day, mainly from onshore and shallow water fields.
The company  attributed the nation’s stagnant oil production to delays in project approvals, restrictions in NNPC funding and tortuous contract award process which have slowed overall reserve replacement and put pressure on long-term production and growth.
Last year, stakeholders in the nation’s oil and gas sector said Nigeria’s crude oil reserve would be totally depleted by 2048 if nothing is done to check the dwindling fortune of the hydrocarbon reserves.
Nigeria’s oil and gas sector was also shocked by the wave of divestment of assets of multinational oil companies in the wake of the year. The country is said to have lost several billions of dollars due to the exercise but the divesting companies claimed that the development is a right step to spur growth of indigenous oil companies.
Perhaps, the growing oil theft in the country is a practice that has pushed the sector to the brink in recent time. Multinational oil companies like Shell, Agip and others have since been counting their losses on that.
Coordinating Minister for the Economy, Mrs Ngozi Okonjo-Iweala recently announced  that Nigeria is losing 400,000 barrels per day of oil to theft, pipeline vandalism and production facilities.
This has reduced the country’s oil production for the first quarter  of the year to 1.988mbpd from 2.073mbpd for the first quarter of 2012 and 2.111mbpd for the first quarter of 2011 April, May and June 2013, according to Organization of Petroleum Exporting Countries(OPEC) report.
The production output figures for Nigeria witnessed further decline with an average of 1.951mbpd in April; 1,930mbpd in May and 1,1861mbpd in June 2013.
A Platt survey revealed that dips in the production of OPEC came from Algeria, Angola and Nigeria, which caused decline of the cartel’s production level by 120,000bpd at the end of June 2013.
Stakeholders in the sector are therefore worried about the impact of the oil and gas sector to the economy. Despite being the highest revenue earner for Nigeria, the sector has not been able to take Nigeria out of the woods.
Former Petroleum Minister, Professor Tam David West is of the opinion that the sector is the most mismanaged in the world due to corruption and lack of requisite initiative by the leaders to move it forward.
President of Lagos Chambers of Commerce and Industry(LCCI), Mr. Goodie Ibru regretted that there is a sharp decline of oil and gas sector contribution to the nation’s GDP from 26 percent in 2003 to 13.42 percent in 2012.
He said the extreme dependence of government finances and external trade balances on proceeds from the sector exposes the nation to significant risks arising from price, production and supply shocks.
According to him, the domestic and international issues facing the oil and gas sector pose both risks and opportunities for the Nigerian economy, adding that the  greatest risk is the potential shock to fiscal sustainability if the global oil price slumps under the current challenges confronting the ability of Nigeria to expand oil output.
He said the assumptions on oil price and production in the 2013 appropriation as well as those contained in the medium term expenditure framework for 2013-2015 may be overly optimistic considering the domestic production challenges and the evolving international oil market dynamics.
He suggested for urgent measures to diversify the economy, as the risk to sustainability of current levels of oil prices are real.
He said:  “The way forward is to fix the structural problems in the economy especially power, the railways, and the road network. All these are critical to enhancing efficiency, productivity and progress in other sectors of the economy namely manufacturing, agriculture, ICT, services and downstream oil and gas.
He also advocated the need to improve the institutions and the policy environment in order to attract more private capital both from within and outside the country.     He further said access and cost of fund are equally very critical to economic diversification.
Lagos Chairman of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Reverend Foluso Oginni, suggested that federal government should be proactive in the nation’s oil and gas sector.
He said given requisite inputs into the Petroleum Industry Bill by well-meaning Nigerians, the oil and gas industry would be competitive in the global oil market and add value to the lives of Nigerians.

http://dailytrust.info/index.php/business/2492-uncertain-future-for-nigeria-s-oil

In other news:

35 new companies(not oyel companies o) to start operation in Ogun State!

This ' na our oyel' go cos gbeke o!

As our eastern brothers they read this news, no be heart attack so?