14 November 2013, Lagos – Nigeria risks missing its target of substantially increasing its crude oil reserves to 40 billion barrels of oil, by 2020, unless the country puts together more investor-friendly fiscal terms in its proposed Petroleum Industry Bill (PIB) currently before the National Assembly, a senior official at ExxonMobil said.
Speaking at the on-going NAPE conference in Lagos, Vice President of ExxonMobil Production Company, Elijah White, said “Nigeria needs to create a stable and attractive investment climate, competitive fiscal terms to attract capital and develop clear regulatory and competitive policies that would enable her to realise the full potential of the industry.”
Nigeria wants to raise its oil reserves to 40 billion barrels by 2020, from around 35 billion barrels currently, but industry officials have said the delay in the passing into law of the PIB, which has been in the works for more than five years, remains a stumbling block, according to Platts report.
“Nigeria is uniquely challenged by reduced exploration activities, decreasing resource size, tightening of fiscals and uncertain gas terms,” Platts quoted White as saying.
Noting that Nigeria, Africa’s biggest oil producer, was fast losing ground in terms of an investment destination to fellow African nation Angola, White said “Nigeria would need to quickly address fundamental issues such as funding limitations and operations inefficiencies.”
Investments in new oil projects have been put on hold following the prolonged delay in the passing of PIB into law, industry executives have said. In addition, an upsurge in bunkering, crude theft and pipeline sabotage, which have disrupted operations, have also been major hindrances to new investments.
Nigerian government officials, however, insist the country’s bid to raise its oil reserves and production capacity remained firmly on track despite the tough challenges of declining investment and security issues, the report noted.
In a paper sent to conference delegates, George Osahon, head of the country’s Department of Petroleum Resources, said even without the new law in place, Nigeria has in the last five years carried out sweeping changes in the oil sector, and was on course to meet the country’s 40 billion barrel reserves target and 4 million barrels per day crude oil production target by 2020, the report added.