Since the first successful oil well was drilled by Shell-BP in 1956 at Oloibiri, Nigeria has acclaimed the status of Africa’s largest oil producer and the sixth largest in the world. However, the Nigerian oil and gas industry has been engulfed in challenges with few success stories.
The statistics are damning: the country loses approximately 215,000bbl/d to oil theft, at an estimated value of US$8 billion a year.
It is pertinent to state that the troubles in the Nigerian oil and gas industry cannot only be blamed on regional instability, oil theft and religious extremism. With the upcoming general elections, the long-awaited Petroleum Industry Bill (PIB) which could help overhaul the beleaguered oil industry appears to be on the back burner, whilst the oil minister’s claims of efforts made to secure pipeline infrastructure have not served as a deterrent to oil theft.
However, with the continuous investment of foreign players and the renewed involvement of local players, DW predicts that in 2015 Nigeria could drill 110 development wells both onshore and offshore. By the end of 2019 Nigeria’s crude output could be 3.39MMbbl/d from its current output of 2.95MM.
However, this is likely to be limited by lack of sufficient infrastructure and potential delays to final investment decisions pending the passing of PIB into law. With the right reforms and stability within the oil rich Niger Delta region, oil output would be sustainable over a longer period which could finally see the Giant of Africa roaring to hit its peak.