Half the Domestic Gas Market Will Be In ‘Nigerian Hands’ By 2018 – Austin Avuru
Nigerian independents will be responsible for 1.5Billion Cubic Feet Per Day (1.5Bcf/d), or half of the total supply of natural gas in the Domestic gas market by 2018, in the opinion of Austin Avuru, managing director of Seplat Petroleum.
These companies will produce 500,000Barrels of Oil Per Day, or about 20% of the Nigerian output, by that same year, Avuru contends. “The ongoing divestment by Shell and other IOCs, including Chevron, is transferring significant asset holdings to Nigerians”, Avuru said at the June 2014 edition of the periodic Q+A session of The Lagos Oil Club last week. He pointed out, however, that these figures can only be reached and sustained by the local minnows if they focus on strong corporate governance, which allows quality planning and delivery and policy consistency, leading to long term sustainability
Shell is currently finalising divestment of its equity, along with those of co-partners TOTAL and ENI, in four Oil Mining Leases (OMLs) 18, 24, 25 and 29, to Nigerian owned companies. OML 29 alone is forecast to deliver 170,000BOPD and 200MMsc/d by 2019 (if optimally worked up), to go by Shell’s own estimates. The buyer of Shell& Co’s 45% stake in OML 29 is reported to have bid $2.85Billion for the asset. Seplat itself hopes to be producing around 100,000BOPD and 400MMscf/d by 2017, from the three OMLs it acquired from Shell in 2010. Shell sold its stake in Oil Mining Lease (OML) 30, its largest producing tract in the Western Niger Delta, to Shoreline Natural Resources in 2011. Gross production in OML 30 is currently 45,000BOPD.
Avuru argued at the presentation that local firms have not cultivated the habit of sustained improvement in production over time, unlike IOCs operating in Nigeria. “There’s no IOC which was doing 30,000BOPD twenty years ago that is not producing 50,000BOPD”, he declared. “But look around, and take a look at Nigerian companies who were producing 40,000BOPD just 10 years ago”.
Source: The Lagos Oil Club