Nigeria’s largest-ever offshore crude exploration vessel, Egina, is expected to begin operation early next year in what can best be described as the country’s ambitious quest for safer crude.
Already, this development is said to be exciting some of the country’s biggest oil companies such as Chevron Corporation, Total SA and Dutch Shell Plc, some of whom have long shifted attention to the deep sea in efforts to minimise the risks that are often associated with onshore exploration.
Note that some of these risks range from kidnapings, crude theft and other forms of sabotage.
Speaking to Bloomberg on this development, the Director of Research at Edinburgh-based stockbroking firm, Wood Mackenzie, buttressed the fact that Nigeria’s oil companies “absolutely love Nigeria’s deep water and they will be delighted to develop it.” This is because by being on the deep sea, they are “somewhat removed from all of the risks of being in the onshore.”
The new exploration prospect is also expected to help boost Nigeria’s crude output by up to 10% up from. It is also expected that by 2022, two-thirds of the country’s crude exploration activities will occur beneath the seabeds.
An untapped potential
Nigeria’s daily oil output currently stands at about 2 million barrel. This is expected to increase especially considering the efforts that are being put in place.
However, the anticipated increase in output may be delayed because, besides the Total SA-owned $4 billion-worth Egina vessel, there are no other facilities that are ready to commence production anytime soon.
In the meantime, Shell is said to be making efforts to expand its $10 billion worth Bonga field. In the same vein, there is Eni’s Zabazaba-Etan project, both of which will take years to get completed.
There are other potential offshore oilfields that can also be developed in order to actualise an increase in Nigeria’s oil output. Examples of these include the Nsiko, Bosi and Owowo oilfields.
Meanwhile, in the bid to increase Nigeria’s oil output through offshore production, there is also the need to avail investors both legislative and regulatory guarantees.
Recall that the Nigerian economy is almost entirely dependent on oil. And at a time when global oil prices remain relatively stable, an increase in output will be favourable to the country.