The Department of Petroleum Resources, DPR, is pushing for new fiscal laws that will attract investors in Nigeria’s oil and gas industry, as it raises concerns about huge untapped potentials in the industry.
The regulatory agency believes that the only way to unlock the huge potentials in the deepwater fields, government should create more attractive fiscal and regulatory regime, incentives based on reserves replacement, ensure accelerated lease renewals and encourage deep play exploration and reserves maturation.
Other things needed to do also, include creating unique fiscal policy for unique emerging plays, responsive legislative environments and for gas commercialization, among others.
The Director, of the DPR, Mordecai Ladan, who was represented by Deputy Director, Upstream, Mr. Enorese Amadasu, stated this at the ongoing offshore technology conference in Houston, Texas.
The deepwater oil blocks are those located in areas of water depth beyond 200 metres and extending up to 200 nautical miles seaward from the coasts of Nigeria and cumulative output from deepwater is 3.2 billion barrels
According to him, oil production from Nigeria’s deepwater province is currently 850,000 barrels per day, representing 40.47 per cent of the total production of 2.1 million barrels per day.
“Currently, total production is 2.1 barrels of oil per day (bpod) while deepwater is production is 850 bopd. Cumulative deepwater production as at December 2018 is 3.2 billion barrels.”
Ladan, said, Nigeria has 83 deepwater oil and gas blocks out of which 30 has been awarded and eight blocks out of the 30, are oil mining leases (OMLs) that have begun production while 53 open blocks are to be awarded.
He said: “Successful progress has been made in growing Nigeria reserves and production from the development of deep offshore hydrocarbons since 2003. Technology has been the key enabler in converting resources into economical reserves. There abound ample opportunities to realize accelerated revenues and sustained investment in maturation of more than 40 billion barrels of oil equivalent resources presently untapped in Nigeria deep offshore area.
“DPR as a regulator, working with other stakeholders including the Nigerian National Petroleum Corporation (NNPC), decided to go into deep water, when the inland and the offshore was already saturated. The only way to do that was to come up with Production Sharing Contract (PSC) agreement, and that was how 83 blocks were mapped in Nigeria deep water and 30 of the blocks was awarded. Eight of the blocks were awarded in 1993, eight in 2000 and other 14 in 2015.”
According to him, today, we have about 13 billion reserves for deepwater and only two billion barrels was explored, so there is need to have more attractive fiscal, change regulatory regime, There is need to amend the policy that nobody brings third parties and investors who will bring floating production, storage and offloading vessels (FPSO).