Shale Oil Not a Threat to Nigeria

Contrary to general concern, George Osahon, director, department of petroleum resources, says the discovery of Shale oil in the US and other countries won’t affect Nigerian oil

|  By Vincent Nzemeke  |  Nov. 4, 2013 @ 01:00 GMT

GEORGE Osahon, director of department of petroleum resources, DPR, has dismissed the concerns that the discovery of shale gas by some countries would affect the export of Nigeria’s conventional gas. Instead, he opined that the new discovery would rather stimulate competition among oil and gas exporting countries. Osahon, who was speaking in Abuja recently, said the discovery of shale gas would help countries to employ relevant technology to identify their competitive advantages over other countries.

Shale gas, according to the United States energy information administration, EIA, refers to natural gas that is trapped within shale formations, which are fine-grained sedimentary rocks that can be rich sources of petroleum and natural gas. Shale gas is extracted by hydraulic fracturing or fracking, a process in which water, chemicals, and sand are pumped into the well to unlock the gas trapped in shale formations.

Reacting to concerns that Nigeria’s crude oil export would suffer in the next couple of years because of the discovery of shale oil in the US, China, India and some other importers of Nigerian oil, Osahan assured that there was no reason to be afraid. He said rather than being regarded as a spoiler to Nigeria, unconventional gas has become a game-changer in the global energy dynamics.

“It is a threat and at the same time, not a threat. Whether we like it or not, there is nothing that will not go through competition. As long as the earth remains, there will always be competition. So, we see it as a threat because we think it is competing with the conventional oil and gas but that does not stop our oil and gas from selling.”

Osahon added that rather than entertain fear, Nigeria needs to ascertain if shale gas could also be found in the country.   “If we have unconventional gas, how much unconventional gas do we have? What does it need in terms of exploration? Can we be fracking in Nigeria? What is the nature of the technology required to explore it and can we build reserves?”

Osahan also advised that if, indeed, Nigeria has the unconventional gas; it must decide when to switch from conventional gas that is currently in use to the new discovery. “If we have unconventional gas, then we should quantify it and decide when we are likely to go from conventional to unconventional. I do not see it as a spoiler; it is probably a game-changer but it is not a spoiler. It just goes to show that we need to do a lot more things about our conventional oil and gas and establish where we are in the unconventional energy scene.”

The discovery of shale gas in the global energy dynamics has raised doubts over the capacity of crude oil to sustain Nigeria’s economy in the next few years as crude oil accounts for more than 80 per cent of the country’s revenue. Nigeria exports an average of 2.2 million barrels of crude oil per day and consumes roughly 286,000 barrels per day, according to the United States energy information administration, EIA.

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