West looks to Nigeria to lessen dependence on Middle East oil
Posted: 14 July 2003
Driven by the West's eagerness to reduce its dependence on Middle
Eastern oil, the Nigerian Government's current policy is, by the
end of the decade, to raise the country's proven oil reserves to
40 billion barrels — almost double current known reserves
— and increase daily production to 4 million barrels a day.
Nigeria has become the hub of activity for West Africa's oil and
related industries in both the upstream and downstream sectors.
This activity is being intensified with the country gearing up
to upgrade its oil refining capacity to become a net petroleum exporter,
its plans to establish a viable gas sector — including the
development of a gas-to-fuel plant — and ongoing oil exploration.
"As international planners look to diminish their dependence
of Middle East supplies, focus is turning to Nigeria and West Africa.
Work on some of these projects which are expected to attract US
investment of some $35-billion in upstream activities alone over
the next five years, are already underway," says John Thomson,
managing director of Exhibition Management Services.
"This is why Nigeria has been chosen to host Nigoil 2003 —
an international exhibition and conference for West Africa's burgeoning
oil, gas and petrochemical industries. The event has the support
of the relevant Nigerian authorities, who have undertaken a major
marketing effort to highlight the opportunities within the sector."
Nigoil 2003 exhibition at the Meridien Eko Hotel, Lagos, September
24 - 26, will cover a broad range of upstream and downstream products,
services and management opportunities in an industry that is looking
to invest heavily in the coming years to upgrade current infrastructure
as well as intensify exploration and refining.
"The expo will provide the platform for both big and small
companies to make initial contacts in a challenging yet dynamic
market, while the Nigoil conference, on September 25-26, is being
designed to bring together the views of senior government officials,
high ranking executives from both national and international operators
and their strategic contracting partners."
In particular, the conference will offer an insight into the opportunities
that exist for foreign companies as the Nigerian government implements
its drive towards partial privatisation and strives to enhance existing
infrastructures. The conference will analyse key issues concerning
structure, investment, deregulation and operational best-in-class
practice and equipment.
Nigerian crude oil production, the world's fifth largest, averaged
2.14 million barrels per day (bbl/d) in 2000. The plan is to increase
this to 4 bbld by 2010, though, as an OPEC member, its daily production
is subject to changing quotas.
Even so, new offshore oil exploration continues and includes such
developments as the Agbami field where initial tests by the the
ChevronTexaco, Shell and Petrobas partnership show nearly 1 billion
barrels of recoverable hydrocarbons.
Oil production should begin by mid-2005 and peak at 200,000 bbl/d
by 2007.
At another field, Akpo-1, initial tests by TotalFinaElf indicate
yields of 9,000 bbl/d of very light oil, while the development of
the Amenam/Kpono field , due to start later this year, is expected
to peak at 125,000 bbl/d. Shell's deep-water Bonga field, with peak
estimates of 350,000 bbl/d is also scheduled to begin production
this year.
A second equivalent major find in the area is due to come on stream
by 2005.
Nigeria also has an estimated 124 trillion cubic feet (Tcf) of
proven natural gas reserves - the 9th largest in the world. Most
of this is currently flared, but plans are in hand to end all flaring
by 2006 - 2008.
Sasol is currently involved in a $1-billion-plus investment with
Chevron Nigeria and the NNPC in gas-to-liquid plant that will be
producing diesel, jetfuel, kerosene and naptha products by 2006.
Other gas projects include the expansion of the supply of natural
gas to the domestic market, the West African Gas pipeline for exporting
gas to Benin, Togo and Ghana and other distribution schemes to help
promote Nigerian consumption of natural gas.
Although currently, the majority of upstream activity is carried
out by the multi-national oil groups, with local companies responsible
for only about 6 per cent of daily production — some 150 000bbl/d
— this is expected to increase when government plans to offer
marginal fields to local firms are rolled out. Offshore companies
have been invited to participate in the development of these fields.
Downstream activitiy is a different picture with more than 700
companies involved.
Nigeria's four state refineries are to be augmented by several
small, independently-owned refineries as well as new developments
sponsored by State governments.
In addition to maintaining self-sufficiency in refining, the Government
is keen to establish infrastructure for the production of refined
products for export. Deregulation of the downstream energy sector
remains a stated government aim.
Nigoil 2003, Nigerian international exhibition and conference,
September 24 - 26, 2003, The New Expo Centre, Le Meridien, Eko Hotel,
Victoria Island, Lagos.
For more information see http://www.exhibitionsafrica.com.
Posted by Richard Price,
Editor Pipeline Magazine
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