BREAKING NEWS, Oil & Gas
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Ali Moshiri, president Chevron African and Latin America Exploration and Production says investments in oil and gas in Nigeria dropped by 20 percent in 2015
| By Anayo Ezugwu | Nov 23, 2015 @ 01:00 GMT |
TOTAL investments in Nigeria’s oil and gas industry, which stood at $20 billion in 2014, have dropped by 20 percent this year. Ali Moshiri, president, Chevron Africa and Latin America Exploration and Production, stated this at the Nigerian Association of Petroleum Explorationists’ conference in Lagos, on Tuesday, explaining that the country accounted for $20 billion out of the $600 billion investment in the global oil and gas industry in 2014.
In Africa, Nigeria was the top producer of liquid hydrocarbon and number three in gas production. The country’s number three position in gas was because of lack of infrastructure and not because of gas resources. The country, he noted, had more gas resources to make it number three or four in the world, but added that the challenge militating against the realisation of this was gas infrastructure deficit.
Nigeria also has tremendous capacity and resources to produce more than two million barrels of crude oil per day, but added that much investment would be required. Moshiri said about $20 billion in investment would be required yearly for the country to increase its current production levels.
He said: “But when you talk about investment, the total industry investment in 2014 was about $600 billion and Nigeria had around $20 billion. After the (oil) price crash, there is tremendous reduction in global investment. Now, the question you may ask is: is that reduction because of cost efficiency or is that reduction because of investment? They are not doing the same thing they did before and it is cheaper. As you can see, investment in Nigeria has significantly dropped by 20 percent.”
Moshiri said many projects were locked up in the country because of cost, and identified the Bonga South West project as one of such. According to him, the current slump in crude oil prices should not be a surprise to anyone as he has witnessed four of such declines in his 40 years in the oil and gas business.
The Chevron president said anytime there was much inventory in the oil market, the price would slump, adding that without the United States’ unconventional, the price of oil would have been significantly higher than what it was today. Moshiri said between last year and now, about four million barrels per day of unconventional oil were introduced to the market and blamed the decline in oil prices on this development.
In his speech, Governor Akinwunmi Ambode of Lagos State noted that with the efforts of oil firms like Lekoil, Afren and Yinka Folawiyo, the state would soon become the 11th oil and gas producing state in the country. According to the governor, Nigeria currently maintains an economically unstable energy trade balance in which it exports virtually all the crude oil produced and import substantial volume of the petroleum products consumed in the country.
Ambode, who was represented by Olawale Oluwo, commissioner for Energy and Mineral Resources, argued that the country had under-utilised other energy sources such as bitumen, coal and non-carbon. “Therefore, the challenge before us is to determine how we as a nation can adapt to these emerging scenarios in global and national oil and gas so that we take advantage of them and shape them to our advantage,”Ambode said.
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