Nigeria’s gas reserves have received a major boost. Mobil Producing Nigeria Unlimited (MPN), a Joint Venture (JV) partner of the Nigerian National Petroleum Corporation (NNPC), has announced a rich gas condensate discovery in its operated Oil Mining License (OML) 104 located offshore Akwa Ibom State.
The announcement of the discovery came just as investigations revealed that the delay in the passage of the Petroleum Industry Bill (PIB) has stalled China’s bid to invest $50 billion to acquire six billion barrels of Nigerian oil reserves.
Nigeria has proven gas reserves of about 187 trillion cubic feet, which ranks it the world’s seventh largest gas reserves holder and indeed the largest in Africa.
NNPC recently projected that the Nigeria’s proven gas reserves could reach 600tcf in 15 years with the commencement of focused gas exploration.
Executive Director, MPN, Mrs. Gloria Essien-Danner, in a statement yesterday, said the discovery was part of the programme to increase oil and gas reserves and production capacity and to supply power and natural gas to the growing Nigerian domestic market.
She said pending results from additional exploration planned in the area, development studies would determine the optimal plan to bring these newly discovered resources into production.
The Pegi-1 discovery well was drilled in 315 feet (96 metres) of water to a total depth of 11,407 feet (3,477 metres) beneath the Awawa Field and encountered 165 net feet (50.3 metres) of rich gas condensate.
“Analysis of recovered samples indicates an API gravity of approximately 41 degrees. Significant additional potential remains in untested deeper targets within the Pegi fault block as well as in adjacent fault blocks.
''This is another example of our commitment to the growth of the oil and gas industry in Nigeria,” the statement quoted Chairman and Managing Director of MPN, Mark R. Ward, as saying.
“We are focused on developing oil and gas reserves and supplying natural gas that will boost commercial power production in line with the Federal Government's aspiration,” he added.
Meanwhile, Chinese investors’ bid to offer $50 billion to acquire six billion barrels of Nigerian oil reserves was said to have suffered setbacks due to the non passage of the PIB.
It was learnt that nothing meaningful has come out from series of meetings between the Federal Government and Chinese authorities with respect to the offer made some 15 months ago.
Several Chinese companies, among them the China National Oil Corporation (CNOOC) in June last year, made a $50 billion offer to the Federal Government to acquire a 49 per cent stake, translating to six billion barrels in oil reserves in 23 of the oil leases held by the IOCs.
A negotiating committee was said to have been set up in the NNPC to handle discussions with the company. The committee was to consider the request and determine an optimum price for the reserves in the blocks against the backdrop of the offer made by CNOOC.
However, almost 15 months after, the committee is yet to come out with anything meaningful.
Presidential Adviser on Petroleum Matters, Dr. Emmanuel Egbogah, told Reuters in Delhi yesterday that discussions by the two countries regarding China’s bid had not progressed.
Although Egbogah did not give details on why the talks had not progressed, a highly placed industry source attributed it to the non-passage of PIB, explaining that virtually all oil and gas deals would be dependent on the bill.
He explained that since there was no regulation in place, investors were reluctant to make commitments on oil and gas businesses, due to uncertainty in the bill.
The presidential adviser, however, raised hopes that the bill may be passed before the end of December so as to pave the way for a new oil licensing round.
"It is likely to be passed by the year end," Egbogah said, adding that said all the terms relating to the bills had been finalised.
He said once the legislation is approved, Nigeria would launch its next oil exploration licensing round in first half of 2011.
The PIB, a wide-ranging legislation, will rewrite Nigeria's decades-old relationship with its foreign oil partners, altering everything from the fiscal framework for offshore oil projects to the involvement of indigenous firms in the sector.
Industry operators had alleged that uncertainty over the passage of the legislation, which has been subject to numerous revisions and debate, has meant billions of dollars of potential investment are on hold in Nigeria’s oil and gas industry.
