Nigeria needs $20bn annual investment in oil/gas industry – Chevron boss
as investment fund drops by 20% in 2015
The global meltdown in the price of crude oil has led to Nigeria losing about 20 percent of the $20 billion investments that flew into the industry in 2014, Ali Moshiri, president, Chevron Africa and Latin America Exploration and Production, has said.
Ali Moshiri, who spoke yesterday in Lagos at the annual conference of the Nigerian Association of Petroleum Explorationists (NAPE), said Nigeria accounted for $20 billion out of the $600 billion investment in the global oil and gas industry in 2014. He added that an annual investment of about $20 billion would be required in the industry for the nation to make appreciable incremental production level to replace what was being produced currently.
Nigeria, he said, has tremendous capacity and resources to produce far above 2 million barrels of crude oil per day, but added that much investment would be required.
The Chevron boss, who pointed out that in 2015, investment in Nigeria’s oil and gas industry dropped by 20 percent, said if there was proper investment in the oil and gas industry, the country could be the leading gas producer in Africa.
“In Africa, Nigeria was the top producer of liquid hydrocarbon and number three in gas production,” he said, stressing however, that “the country’s number three position in gas was because of lack of gas infrastructure and not because of gas resources.”
According to him, Nigeria has much more gas resources to the extent that the country could be number three or four around the globe, but added that the problem is lack of gas infrastructure.
He said: “When you talk about investment, total industry investment in 2014 was about $600 billion and Nigeria had around $20 billion. After the price crash, there is tremendous reduction in global investment. Now the question you may ask: 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 Nigeria because of cost and identified Bonga South West project as one of the projects, adding that the current slump in crude oil prices should not be a surprise to anyone as he had witnessed four of such decline in his 40 years in the oil and gas business.
He 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 had been significantly higher than what it was today.
About 4 million barrels per day of unconventional was introduced into the market between 2014 and 2015 and blamed the decline in oil price to this development, he said.
He s suggested what could be done to boost the production level in the country, one which he said is collaboration between the government and the joint venture partners.
Governor Akinwunmi Ambode ,In his speech, noted that with the efforts of Lekoil, Afren and Yinka Folawiyo, Lagos State would soon become the 11th oil and gas-producing state in the country.
The governor however stated that Nigeria currently maintains an economically unstable energy trade balance in which the country exports virtually all the crude oil produced and import substantial part of the petroleum products consumed in the country.
Ambode, who was represented by the Commissioner for Energy and Mineral Resources, Olawale Oluwo, also argued that the country has under-utilised other energy sources such as Bitumen, Coal and non-carbon-related energy sources.
“Therefore, the challenge before us is to determine how we as a nation can adapt to these emerging scenerios in global and national oil and gas, so that we take advantage of them and shape them to our advantage,” Ambode added.
While fixing December 8 and 9, 2015 for commencement of trial, Justice Muhammad ordered the accused persons to be kept in EFCC custody pending the fulfilment of the bail conditions.