Despite being blessed with abundant human and natural resources, which are the basic ingredients for a prosperous nation, Nigeria, regrettably, suffers from resource curse.
Industry chiefs, at the recently concluded 2012 Nigeria Oil and Gas (NOG) conference and exhibition in Abuja, while expressing concern overthe country’s future, with regard to energy issues, came up with some recommendations.
In his presentation, the Country Chair of Shell Petroleum Development Company (SPDC), Mutiu Sunmonu, noted that apart from the nation’s huge natural endowment and manpower, there were still steps to be taken for the country to realise its full potential in the oil industry.
He said that there must be huge investment in exploration activities, an efficient regulatory framework, in addition to peace and stability which can help improve onshore production.
“Why are we not exploring, I do believe that there is plenty of room to improve our efficiency if we are to make our industry like others in the world. Regulatory framework is necessary; if we have a weak regulation, it will slow down everything,” he said.
?While urging operators to support government policies and collaborate on funding of investments, he said that more FDI should be taken, especially in deep water exploration, noting that there was also no reason onshore production could not be more than 600,000bpd, if there was adequate security in the operating environment.
Similarly, the Managing Director of ExxonMobil Nigeria, Mark Ward, stressed that the vital ingredient needed to increase exploration and production activity in the country was the passage of the Petroleum Industry Bill (PIB). He said that getting the PIB right was as important for government as it was for the industry and investors.
“Nigeria’s hope of realising growth and creating new jobs is to put in place enabling environment for investment in the oil and gas industry and now is the time for government and industry to partner and achieve this vision,” Ward said.
On his part, the Managing Director of Total Nigeria, Guy Maurice, said that Nigeria could not meet its target of attracting $100 billion worth of investment within the next couple of years without industry stability which the passage of the PIB could guarantee.
He expressed dismay that in the last 20 years, the country had declined in its exploration activities despite support from the IOCs. “The capacity of the country to renew its exploration activities and passage of PIB will determine its energy future,” Maurice noted.??
Furthermore, the Executive Vice President, Sub- Saharan Africa, Shell Exploration and Production Africa Ltd, Ian Craig, said, in his paper entitled 'Nigeria- Challenges and Opportunities', that the greatest challenge in the sector now was the problem of the massive organised oil theft business and the criminality and corruption which it fosters.
While estimating the volume of oil stolen daily in Nigeria to be about 150,000 bpd, he explained that it costs about $20 million and over $100 million to drill a typical land-based and deep water well respectively in Nigeria. “And one well is of course never enough to prove a prospect; you normally need several appraisal wells to be sure that a discovery is viable,” he said.
This therefore, underscores the need for security and stability to be entrenched in the sector as no investor would be willing to invest such huge amount in an uncertain business environment.