Nigeria sees output dip risk from 2020

Nigeria can expect to see absolute declines in oil and gas production from 2020 unless new reserves are discovered and brought into production, the ministry of petroleum resources said.

Upstream investment in Nigeria has been stifled over the past decade by uncertainty over future petroleum legislation and plans for tougher fiscal terms for international operators. Militant and criminal insecurity in the main Niger delta producing area has also led to an sharp downturn in exploration activity and investment.

Exploration in potential new oil provinces was needed to prevent the decline in output from around 2020, the ministry said. This included the Chad basin, in the north of the country.

Staff working for NNPC exploration subsidiary Integrated Data Services were among those feared kidnapped earlier this month while carrying out initial geological and mapping services in the area, which has has seen a campaign by extremist group Boko Haram against the government and the Nigerian military.

Other oil and gas sedimentary basins have been identified but not yet developed, including the Anambra, Kerri, Yola, Gongola, Bida and Lullemeden basins.

Stability in the delta is also key to future production, the ministry said. Criminal and rebel attacks against key oil and gas facilities has curbed production and investment.

Shell had to shut-in the Trans Niger Pipeline on 21 July because of a leak, seven days after having declared force majeure on exports of the grade through the Nembe Creek Trunk Line, also because of a leak. Shell lifted a prior force majeure on Bonny Light exports on 28 June.

Community protests against the operations of international oil and gas firms are also common in the delta. Talks between the government and groups in the delta are scheduled to resume next week, led by acting president Yemi Osinbajo.

Government payments to former rebel fighters and economic investment in the delta is seen as central to ensuring the recent improvement in Nigerian oil production to its highest level in a year. Oil and condensate production had recovered to 2mn b/d before the latest Shell pipeline incident.

The delta region consists of nine oil-producing states — Abia, Akwa-Ibom, Bayelsa, Cross River, Delta, Edo, Ondo, Imo and Rivers — and 185 local government areas.