A Review of the Nigerian Energy Industry

Obstacles mar marginal fields programme

Marginal-oil-fields, Nigeria07 August 2013, Lagos – Ten years after the commencement of the marginal fields programme, the objectives of the federal government concerning the programme are yet to be met. This is because marginal fields’ operators are currently struggling to meet up with the expectations in terms of production target and contribution to the country’s energy sector.

The marginal fields operators are also battling with legal issues brought about by partnership foisted on them by the government during the award of the fields, lack of access to funding, crude theft, pipeline vandalism, among others.

According to the operators, funding challenges, non-delivery of technical/financial partnership agreement, frequent shut down of the export line, community interference and shutdown of their operations and contractors’ inability to deliver projects on time and in good quality are factors negatively affecting their growth and sustainability.

They also identified the local content policy as a major challenge to their operations, especially in view of the inherent challenges and harsh operating environment confronting their contractors.

According to them, “the cost of doing business in Nigeria is very high, infrastructure is nothing to write home about, lack of technology, which result in the importation of technology and services required for oil and gas development.”

The Director, Department of Petroleum Resources, DPR, Mr. George Osahon, said the contribution of marginal field operators to Nigeria’s crude production remains insignificant.

According to him, marginal fields only account for 2.1 per cent of the country’s total crude production, with a daily production of about 60,000 barrels of oil per day and 100 million standard cubic feet of gas per day.

He said that despite developing the fields, out of the 24 marginal fields awarded in 2003, and the five fields awarded on a discretionary basis, only nine are producing.

– Michael Eboh, Vanguard

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