Uche Cecil Izuora
A new report has revealed that the overall crude and natural gas production from offshore fields is expected to grow steadily by 2028.
The ‘Global Offshore Upstream Development Outlook, 2024-2028’ report published by ResearchAndMarkets.com listed Nigeria among top countries contributing to the growth.
According to the report, Nigeria, Brazil, and Guyana are expected to be the important countries contributing to the surge in crude and condensate production through upcoming projects.
Concurrently, Iran, Qatar, Russia, and Australia are set to spearhead the expansion of natural gas production.
The report considered offshore oil and gas production outlook by key countries, and key companies for the period 2024 to 2028, Greenfield offshore projects capital expenditure outlook by key countries, key companies, and field terrain for 2024 to 2028 and major projects count by key countries and offshore terrain as well as details of key upcoming offshore crude and natural gas projects
The report may have taken cognizance of significant shift in Nigeria’s upstream oil and gas sector where indigenous energy companies are increasingly entering the field and positioning themselves to compete on a larger scale. Local oil companies (LOCs) have successfully acquired assets divested by International Oil Companies (IOCs) while emerging firms are successfully securing blocs in marginal fields and shallow waters.
The past year has been particularly noteworthy, marked by the completion of major divestment deals and conclusion of the 2024 bid round.
A new era begun with new entrants in the industry securing lucrative oil wells during the just concluded 2024 bid round, a process overseen by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and marked by transparency.
This was the first bid round since the enactment of the Petroleum Industry Act (PIA) in August 2021 and the first fully supervised by the Commission.
Engr. Gbenga Komolafe, the Commission Chief Executive (CCE), described the moment as pivotal: “This Licensing Round (2024) is not merely a commercial exercise; it is a bold declaration that Nigeria is ready for business.”
Chapter 4 of the PIA supports indigenous oil companies in Nigeria’s upstream sector. It stipulates provisions for marginal fields. These fields, defined as dormant or categorised as marginal before January 1, 2021, are convertible to Petroleum Prospecting Licenses (PPLs), allowing indigenous firms to benefit from favourable terms. Such fields must have been discovered but left untapped for at least ten years from the initial discovery date.
The PIA also prioritises local content and transparency, creating a more conducive environment for indigenous participation. It was the cornerstone of the 2024 Licensing Round as it introduced several attractive fiscal regimes designed to stimulate investment.
Nigeria is rich in crude oil, condensate and natural gas reserves, accounting for over 30 per cent and 33 per cent of the continent’s total oil and gas reserves, respectively.
The country also possesses a diverse array of renewable energy resources and its future is largely linked to the development of key mature hydrocarbon fields, which offer substantial opportunities for growth.
These include Nsiko Field (OML 145), Bonga Southwest/Aparo Field (OML 118) and OML Egina South Field (OML 130).
These fields, including others in development, form a fundamental part of Nigeria’s long-term strategy to increase production capacity and maximise its reserves. Nigeria targets oil and condensate output of 2.06 million barrels per day (bpd) for 2025 and 2.6 million (bpd) in 2026.
Also, there have been concerted efforts to leverage this endowment and boost Nigeria’s economy, through attractive incentives to investors.
On February 28, 2024, President Bola Ahmed Tinubu signed three Executive Orders as part of a government initiative to enhance investment opportunities in the country’s oil and gas sector to improve the efficiency and attractiveness of the sector, with deliberate incentives for oil and gas development, including measures to prevent local content bottlenecks from hindering development and firm directives for reducing contracting costs and timelines to enhance global competitiveness and achieve a higher rate of return on investments.
This marked a significant step in a transformative agenda aligned with stringent international standards and commitments.
The NUPRC concluded the 2022/2023 licensing rounds and initiated the 2024 licensing round which it supervised from start to finish.
This era presents significant opportunities for domestic and international investors in Nigeria’s hydrocarbon industry.
The rounds were designed to align with global sustainability goals, ensuring that Nigeria’s oil and gas development meets both economic and environmental standards. The Commission, in line with the PIA, introduced comprehensive reforms and developed a regulatory framework aimed at modernising licensing processes, enhancing stakeholder engagement and ensuring environmental sustainability.
The aim, basically, was to attract both local and international investments that would drive growth and innovation. The Commission issued a licensing round guideline and published a plan for the blocks on offer. The 2024 round featured several blocks selected across varied geological terrains – from the promising onshore basins to the lucrative continental shelves and the unexploited depths of deep offshore basins.