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Monday, May 29, 2023

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Independents to Account for 25% Oil Production by 2020

Independents are projected to account for about 500kbpd by the year 2020, representing 25% of crude oil production in Nigeria, from the current level of 10%. The development is seen as a reflection of the changing landscape of the oil and gas industry in Nigeria.

Key Recommendations:
• Integration of the upstream to other parts of the value chain may eventually be driven by the independents.
• Challenges such as security, especially for independents operating in shallow waters.
Local companies reiterated that security and community challenges have greatly altered their cost of production which cannot be fully ascertained. When coupled with Government take and interest from loans the cost per barrel increases.
• Government is to ensure that an enabling environment is created – independents need to be able to deliver on capacity growth and funding.

The major challenge now is that banks do not want to fund potential exploration and this is hampering growth plans of independents.
• There is a great need to increase reserves if sustainability is to be ensured within the current low oil price regime.
Another issue bleeding income from the independents is pipeline loss charged by operators. Independents called for government to look
into the possible divestment of pipelines to help reduce cost.
• Independent companies were urged to collaborate and see how they can address existing security and community challenges as well as participate in intelligence gathering and aid security agencies.

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