Nigeria has the potential to significantly boost its oil production by bringing eight major idle oil fields online. This move could add 900,000 barrels per day (bpd) to the country’s current output, offering a vital boost to the struggling energy sector.
Despite sitting on 36 billion barrels of crude oil reserves and 206 trillion cubic feet of proven gas reserves, Nigeria has seen a steep decline in investments in its oil sector in recent years. Many crucial oil and gas projects remain idle, putting the country’s goal of raising reserves to 40 billion barrels at risk.
The idle projects include the Zabazaba field with a potential of 150,000 bpd, Shell’s Bonga South West at 225,000 bpd, Bonga North project at 100,000 bpd, Chevron’s Nsiko project at 100,000 bpd, ExxonMobil’s Bosi at 140,000 bpd, Satellite Field development phase at 80,000 bpd, and the Ude field at 110,000 bpd.
Experts believe that optimising these idle assets could lead Nigeria to economic prosperity. However, they emphasize the need for disciplined planning, economic reforms, and consistent government policies to inspire investor confidence.
“The projected gains from Nigeria’s oil and gas sector following the passage of the Petroleum Industry Act have not materialized due to poor implementation,” said a senior industry source who wished to remain anonymous.
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Austin Avuru, executive chairman and founder of AA Holdings Limited, highlighted the necessity of significant investment in the oil and gas sector.
“We need to invest $25 billion annually to stabilize production at 2 million barrels per day,” Avuru stated during a recent presentation at a Harvard Business School event. “This investment is crucial to ensure the sustainability of the sector and its contribution to the national economy,” he added.
However, some experts questioned the Nigerian National Petroleum Company’s (NNPC) recent move to secure a $3.2 billion loan from the African Export-Import Bank (Afrexim). They argued that NNPC should focus on improving its technical efficiency to deliver more crude oil.
“The state-owned company should be ashamed that the drop in crude oil output, which worsens the value of the naira, is largely of its own doing,” noted the Africa Oil+Gas Report.
The NNPC operates several producing assets, including the Okono/Okpoho fields in Oil Mining Lease (OML) 119 offshore Niger Delta. Despite having the potential to produce 30,000 bpd, the fields have been stuck at a low output of 10,000 bpd for over five years due to facility constraints.
Tunde Adenikan, a senior energy analyst, pointed out that investor confidence remains low due to ongoing corruption and lack of transparency.
“There are still reports of corruption among operators who are slow to adjust their ways,” Adenikan said.