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By Obas Esiedesa, Senior Reporter, Abuja
Uncertainty following the delay by the National Assembly to pass the Petroleum Industry Bill (PIB) is holding back planned investment of about $30 billion in two offshore deepwater projects in the country, according to Country Chair of Shell Companies, Mutiu Sunmonu.
Addressing participants at the ongoing Nigeria Oil and Gas conference in Abuja on Wednesday, he lamented the country’s current production level, which he said was far below its full potential at deep waters.
“I recall the Mexican story. It took them 50 years to recover from that loss in oil production and my worries is that we are slipping into that. Even today, if we produce a modest allowance of 3mbpd, and just assume a modest decline rate of 10 percent, that leaves us with 2.7mbpd.
“What this means is that for us to maintain that level of 3mbpd, we must produce additional 300,000bpd; it means that we need at least two deep water projects every year and then, you are talking about additional $30 billion investment every blessed year for us to remain at that level but that is not going to be easy.
“If we look at our onshore today, it is nowhere near the capacity we have today, most of what we have today comes from our deep offshore operations but there is a lot more that we can get out of onshore but that is the place that has serious financing challenges.
“Deep water portends a huge opportunity, in Shell, we have two big projects we will like to do as soon as we are sure that the environment and the conditions are right, costing us about $30 billion and I am sure it is the same with the other IOCs (international oil companies) because each of us have projects in the pipeline, but we are all waiting for the almighty PIB to be able to make these decisions. It is very clear in my mind that the potentials are there but turning those potentials to reality requires a lot of hard work, creative thinking and genuine value creation.
“Making sure that we minimise the leakages in our operations today because we have talked about it before that crude oil theft continues to be a menace; if our country is losing 100,000bpd to 150,000bpd that is huge, some of the companies that are parading themselves as crude oil production companies today cannot even boast of 80,000bpd, and if we are filtering away that much, then it calls for urgent action,” he stressed.