Yesterday, Nigeria’s crude oil sector was handed a major boost as ExxonMobil confirmed the discovery of crude oil in another offshore field in Owowo located in the Koloama area of Bayelsa state. The well, spud on October 23, is said to have a potential recoverable resources of between half a billion and a billion barrels of crude oil.
Stephen M. Greenlee, president of ExxonMobil Exploration Company, announced the discovery saying “We are encouraged by the results and will work with our partners and the government on future development plans,” Leadership News reports.
However, probably more encouraged and relieved than the oil firm by this discovery will be the Federal Government of Nigeria. The reasons for this are quite clear. First, despite all our talk about diversification of the economy to non-oil sectors and boosting other sectors of the economy, Nigeria still depends on crude oil for funding its budget. And given the current happenings, this is likely to be so for some time to come. Thus, news of crude oil discovery means more crude oil revenue.
Another related reason is the recent increase in the cries of possible depletion of the nation’s crude oil reserves in a not too distant time. For example, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, had earlier said this month that the current reserves will only take it for 35 more years unless the reserves were shored up.
Similarly, in February, Chairman of PETAN, Mr. Emeka Ene, noted that the nation’s crude oil reserves might not sustain the realisation of the country’s long term economic targets if urgent measures were not taken to boost exploration activities and build reserves.
Given these assertions, the oil discovery by ExxonMobil takes on added meaning for Nigeria who can only hope that until we get the diversification project right, we will continue to make oil discoveries. Anything less will mean a financially bankrupt country.
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