Oil majors, last week said Nigeria's plan to achieve four million barrels of daily oil production, and 40 billion barrels in reserves by 2020, is not feasible under the new fiscal terms being proposed by the Federal Government in the Petroleum Industry Bill, PIB.
The oil majors, under the auspices of Oil Producers Trade Section, OPTS, of the Lagos Chamber of Commerce and Industry, LCCI, said the suspension and lack of new investments in the oil sector is negatively affecting the planned production increases.
Oil majors, last week said Nigeria's plan to achieve four million barrels of daily oil production, and 40 billion barrels in reserves by 2020, is not feasible under the new fiscal terms being proposed by the Federal Government in the Petroleum Industry Bill, PIB.
The oil majors, under the auspices of Oil Producers Trade Section, OPTS, of the Lagos Chamber of Commerce and Industry, LCCI, said the suspension and lack of new investments in the oil sector is negatively affecting the planned production increases.
The group led by Mrs. Lola Delano at a function in Lagos last week, noted that for Nigeria to achieve the target of four million bpd, it has to produce about 260,000 barrels daily or the equivalent one new deepwater field every year for the next eight years.
The fact that there is no deepwater field with a capacity of 260k bpd and no new fields are coming on stream make it the more difficult, now compounded by the "harsh fiscal terms in the new PIB."
Besides, she noted the old ones are currently facing constraints under current fiscal terms and might discontinue production if the PIB currently before the National Assembly is not restructured and passed as is.
Specifically, in the onshore arena, the team said that current projects are experiencing more than 33 percent rate of decline; with about 30 percent of them or $10billion worth of investments are at risk.
The argued that the PIB terms will not enable the investments needed to sustain JV oil production, due to bunkering and insecurity, adding that the new bill will make JV fiscals extremely uncompetitive.
In comparison with some oil producing countries, they stated that in Equatorial Guinea, government take in the onshore/shallow water oil is 44 percent, while in Ghana, Kazakhstan, Russia and United Kingdom; it is 52 percent, 61 percent, 65 percent and 68 percent, respectively. Also, in Trinidad, UAE, Norway, Venezuela and Angola, it is 73 percent, 77 percent, 80percent, 82 percent and 83 percent respectively.
They argued that production without new investments will decline by 40 percent, while production with new investments will increase by 44 percent.
Discussion about this post