Ten Oil Fields Now

There is a Nigerian attitude; When it is raining put out your buckets.

Nigeria: And Then There Were Ten Oil Fields – Report

Lagos — Active oil fields in Nigeria which stood at 46 five years ago have dropped to 10 in the outgoing year, according to a report conducted by the Lagos Chambers of Commerce and Industry.

The report titled “Year End Business Environment Report”, was signed by its Director-General, Muda Yussuf and made available to our correspondent.

It attributed the drop in the number of oil fields to lack of new investment in exploration which was fueled by policy somersault of the federal government.

The report also noted that the uncertainty about the Petroleum Industry Bill (PIB) persisted as the fate of the bill is still unknown.

“Given the enormity of capital requirement for investment in this sector, it is difficult to expect any progress in the circumstances,” the report said.

The report said upstream oil and gas companies expressed concern over the capacity of contractors in the sector leading to exorbitant cost of contracts and unsatisfactory delivery in quality and time.

According to the report, there were often disputes between the oil companies and contractors; and between the government and oil companies.

It, however, said no mechanism for speedy resolution of such disputes was put in place as the development constitutes a major albatross for upstream investors.

The report also noted the rising security lapses leading to escalation of oil theft and vandalism and implored legislators and all relevant stakeholders to expedite the passage of the new Petroleum Industry Bill. It advised federal and state governments to show better commitment to the development of host communities.

Companies with an intention for long term viability look at government intervention, taxes, and stakeholder participation and citizen involvement in contracts – after all the resource is coming out of their hood. All of these parties say it is raining now but soon the rain may end.

When you have to pay everybody before you start a project the risk is quite high, especially when you know everyone will still be there to continue to tap your profits, in one way or another.

This is an unacceptable condition for any long term viable project.
If Nigeria wants to continue to benefit from their natural resources they have to protect those that assist them in these efforts.

We need more Nigerians with a farmers attitude towards a continued harvest. The success of a continued harvest is contingent on the health of those doing the harvest.

Jeff Scott – CFO
Nigerian Oil Services LLC (USA)
Resource cited:
On Thu, Dec 20, 2012 http://allafrica.com/stories/201212200312.html