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NIGERIAN CRUDE OIL AND GAS.
Nigeria's rising oil and gas fortunes
Nigeria has the largest population in Africa and is the most populous Black
nation on Planet Earth. The 1991 National Census put the country’s
population at 88.5 million, with an annual population growth rate of between
2.5 and 3.0 per cent. It is estimated that the country’s current population
has gone above 150 million.
The country occupies a land area of 923,769 square kilometres, the largest
in West Africa and four times the size of the United Kingdom.
In the Niger Delta, Nigeria has the largest deposit of oil and gas in the
West and Central African sub-region. This vital commodity is currently the
major source of Nigeria’s gross domestic product, (GDP) government revenue
and the nation’s annual foreign exchange income.
Nigeria’s oil and gas industry, growing as it is now, deserves an oil and
gas services centre. To all intents and purposes, the concept of an oil and
gas service centre, which is yet a novelty in Nigeria, has been fully
developed in places like Aberdeen, and Stavanger, in the North Sea.
It is also the case in Ravenna, Italy, Morgan City, in the Gulf of Mexico
and almost all over the world where there is petroleum activity. The essence
of this specialized centre is to have a central place where world-class
information and technology on all issues concerning oil and gas related
matters, can be assessed effectively.
Concerning Nigeria’s rising crude production, this has already been
professed by a world-class industry magazine, ‘Offshore Oil and Gas
Operations of Penn Wall’, in an earlier report on crude oil production.
This scientific prophecy actually spurred Nigeria to earn an increased OPEC
market share recently. Equally, this may have moved the belief that
Nigeria’s crude production is rising. NNPC and DPR are aware, as talks have
begun with capable multinationals, for exploration. In fact, activities have
begun.
The fields are located in OPLs 212, 209, 316 and 216. They are being
developed under PSCs with the Nigerian government, through the NNPC. The
fields include Shell’s ESCO’s Erha field, ABO field, held by Nigeria Agip
Exploration and Agbami field, belonging to star deepwater/Famfa Oil Company.
Agip’s ABO field on OPL 316, is believed to contain over 800 million bbl
reserves with 150,000-200,000 b/d Famfa Agbami field in OPL 216 is also
expected to produce 125,000 b/d of oil when on stream, with a proven crude
reserve of over I billion bbl.
Collectively, the four fields which had commenced production since 2003,
will be producing about 890,000 b/d. Bonga field, graciously commissioned by
Mr. President late last year, has been confirmed to contain 1 billion bbl.
of crude reserves and an estimated output of 250,000 b/d, while Erha field
has a potential daily production capacity of 140,000 bbl.
Agbami is on course. Otherwise, two more appraisal wells, Agbami -3 and
Agbami –4, were successfully drilled back-to-back, with Transocean Sedco
Forex’s drillship. Deepwater Discovery on the huge Agbami structure, paving
the way for development of the field.
Agbami is located in OPL 216, in deepwater Nigeria. Texaco is the technical
partner (with 40% interest) to the indigenous company, Famfa, which holds
the lease. At one billion bbl, Agbami is the biggest field in Texaco’s
assets, worldwide. The field development plan for Agbami envisages a
floating production storage and off-loading (FPSO) vessel, designed to
handle 200,000 b/d and 260 mmcf/d of gas and to store at least, two million
bbl. of oil.
No doubt, the plan also calls for deployment of a dry tree platform. Agbami
straddles Statoils’s OPL 217, (in which Texaco also has an interest) as well
as Famfa/Texaco’s OPL 216. The field is due to come on stream in mid this
year, (2005) with output expected to peak at 200,000 b/d in 2007.
One strategic challenge of the growth of oil and gas industry in Nigeria is
the place of Free Zone stations. To attract foreign participation in
Nigerian oil and gas sector, the Nigerian government is currently working on
Free Zone Stations (FZS). An example is the Onne Ports, comprising the
Federal lighter and ocean terminal ports located at Onne, (outskirts of Port
Harcourt metropolis) 20 miles away.
Onne port as a Free Zone will enable Nigeria to become a focal point for
foreign investors not only regarding the Nigerian oil and gas industry, but
to also cover the increasing demands of the entire West Africa petroleum
market.
Free Zones (FZs) exist in many parts of the world such as Miami (Florida,
USA), Batam Island, (Indonesia) and Jabel Ali, (Dubai, UAE) to name only a
few.
Oil and gas being the main West African resource, a specialized Free Zone
would be based on the oil industry and its associated business sectors. A
specialized Export Free Zone would group together industries operating in
the different oil and gas sectors:
1. Upstream (exploration and production);
2. Downstream (refining, distribution and marketing) and ;
3. Transit and Supply base and related activities like shipping,
air-freighting, transportation, freight forwarding, estate development and
others.
In view of our expanding oil and gas fortunes, the target of such FZ is to
serve not only Nigeria, but to extend its market potentials to all of the
Central and West African economies.
Developing Free Zone with technical reference to oil and gas will boom
foreign investment, (in fact FDI) capital flow and technology. Therefore, we
will benefit in terms of skills, employment and incomes. Onne port’s key
position, in the centre of the Gulf of Guinea, is the perfect logistics
location for the Export Free Zone, to serve the West and Central African
markets.
Onne is close to Port Harcourt, which is served by an efficient
international airport and is a major player and centre of oil firms
operating in Nigeria. No doubt, the future of oil and gas is very bright.
