Indigenous oil service group, Petroleum Technology Association of Nigeria (PETAN) has tasked the federal government to seize the opportunity of low operating cost in the petroleum industry to launch new exploration phase in the country.
Chairman of the group, Mr. Emeka Ene, who decried the lull in the country’s petroleum industry stated that Nigeria must grab the opportunity of falling cost of industry exploration services to reignite implementation of the stalled petroleum industry programmes in the country.
He said revival of exploration activities has become extremely necessary in the face of the prevailing gloomy oil price outlook. He explained that the logical step for a resource dependent economy like Nigeria is to boost output to bridge revenue gaps created by steep fall in prices of crude oil and natural gas in the international market.
Mr. Ene who spoke with The UNION on sidelines of the Practical Nigerian Content Forum in Yenegoa, Bayelsa State, pointed at the country’s stalled exploration programmes, fast depleting reserves and new field development projects as capable of yielding multiple jeopardy.
According to him, falling reserves means that both the value and sustainability of Nigeria’s oil and gas are limited in the long term, explaining that new field development activities in the deepwater, aging onshore and shallow offshore assets and loss of investors’ appetite for exploration mean that depletion would accelerate very imminently.
Acute depletion of existing reserves with little or no replacement plans, he warns, would post a gloomy economic future for the country, noting that there is no sector that would effectively fill the revenue role of petroleum in the country’s economy in the short to medium term.
While advising the government to activate economic diversification plans, he made it clear that reserves growth and production boost have become inevitable under the country’s current economic realities.
The UNION reports that part of the country’s key aspirations in the upstream petroleum industry is to raise the daily crude oil production to 4.0 million barrels per day and build the nation’s reserves to 40 billion barrels.
However, data from the Department of Petroleum Resources (DPR) shows that reserves are fast depleting as more and more production fields come online and even old ones come under more pressure to produce.
The agency which regulates the industry also shows that rig activity in the country is concentrated on field development activities and appraisal drilling on earlier exploration results. Wild cat exploration was absent in a recent industry drilling chart seen by the The UNION.
The UNION reports the industry in driving various field development activities including those by Shell at operated Bonga Fields, Total at operated Egina Field, Mobil at operated Erha field, Agip at operated Etan/Zababa field, and Chevron.
Mr. Ene stated that these development activities and no exploration success in recent times mean that production pressure would mount on existing reserves and accelerate depletion.
He called on government to activate plans for accelerated exploration drilling now that industry is experiencing low service costs.
He explained that other oil producing countries including fellow members of the Organization of Petroleum Exporting Countries (OPEC) in Middle East and North Africa have high rig counts after stimulating exploration activities.
He said MENA countries currently invest annual average of $40 billion in exploration and urged government to take similar steps, arguing that if Nigeria missed the prevailing low cost cycle and begin when the oil price rebounds, the nation’s oil would yield least revenue returns among peer OPEC members
– Sopuruchi Onwuka