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Author Investment Potential Nigeria Oil and gas UPSTREAM  (Read 945 times)

Description: The Nigerian Oil and Gas reserves have grown tremendously since the discovery of hydrocarbon in 1956 in Oloibiri.

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Offline Ade Omo Ade

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Investment Potential Nigeria Oil and gas UPSTREAM
« on: May 02, 2012, 04:27:56 PM »


 The growth was from a modest figure of 0.184 billion barrel of oil and 2.260 billion cubic feet of gas in 1958 to 25.93 billion barrels of oil, 3.80 billion barrels of condensate and 158 trillion cubic feet of gas, as at December 2000.

The reserves increase was achievable because of two main factors namely:

The introduction of various incentives by the Government for increasing oil reserves and gas utilization. In order to increase oil reserves, a Memorandum of Understanding (MOU) was negotiated and agreed to guarantee a notional profit margin of US $2/bbl. This was revised to include the Reserves Addition Bonus clause, which qualify the operator for a tax credit for additions to reserves that exceeds its production for a year.

Opening up of other basins, which are blocked into concessions and awarded to competent entrepreneurs for exploration and development (Fig. I). The basins are Benin, Anambra, Benue Trough, Chad and the Deep and Ultra-deep offshore area of Nigeria.

The first four of these basins are relatively un-explored while the Deep and Ultra-deep offshore are now partially explored. The opening-up increased the number of companies exploring for hydrocarbon in Nigeria from just a few to 59 with 46 of them discovering oil, gas and/or condensate in significant qualities. This brought about the conversion of 91 of 177 Oil Prospecting Licenses (OPLs) to Oil Mining Leases (OMLs).

Seventeen of these companies have gone into actual production. In the deep and ultra-deep offshore terrain, 12 companies have discovered oil and gas in commercial quantities. This encouraging result made the Government to open up 22 new blocks to interested entrepreneurs for competitive bidding process in year 2000.

Government also awarded 24 of the 200 fields classified as marginal by operators due to low ranking in their investment portfolio and/or remoteness to existing facilities to 32 local companies. These 24 Marginal fields have an estimated reserve of about 300 million barrels of crude.

Similar drilling that target deeper pools are bound to yield more reserves as depth of investigation was erstwhile limited to about 3000 meters.

Government encourages drilling that will target deeper horizon by giving exploration, first and second appraisal incentive to wells that investigate depths in excess of 500 meters beyond that of the deepest well in the field.

Some of the major activities in which investment opportunities abound include.
 
Surveying; Civil Works
Seismic Data Acquisition and Interpretation.
Geological Activities; Drilling Operations
Crude Oil Transportation and Storage
Exploration and Production

Upstream Opportunities

•Surveying - tropical and plan metric; and sea bottom survey.
•Civil Works- mud pit construction, concrete works at rig sites.
•Seismic data acquisition and interpretation.
•Drilling operations.
•Pipelining
•Crude oil transportation and storage.
•Exploration and production of oil and gas products.
•Manufacturing of consumable materials in exploration such as explosives,
•Detonators, steel casting, magnetic tapes etc.
•Search for development of local substitutes for items such as medium pressure valves, pumps, shallow drilling equipment, drilling mud, bits fittings, drilling cement etc.


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