Marginal fields contribute 2.41% to Nigeria’s crude production

The dwindling fortunes of marginal fields’ operators in the Nigeria’s oil and gas sector continued, as the subsector contributed 2.41 per cent to Nigeria’s total crude oil production in the month of March 2014.

According to data from the Nigerian National Petroleum Corporation, NNPC, on oil and gas activities for the month of March 2014, the marginal fields’ operators produced 1.645 million barrels of crude oil, representing a daily average of 53,086.26 barrels.

This is against a total of 68.367 million barrels produced by all the operations in the sector in the month under review. This translates to an average daily crude production of 2.205 million barrels, showing that the marginal fields’ operators are yet to make significant impact on Nigeria’s petroleum sector.

The Joint Venture, JV companies dominated crude production in the period under review, accounting for

41.18 per cent of the total production with 28.156 million barrels of crude oil per day or an average of 908,272.32 barrels per day.

Production Sharing Companies, PSCs, followed with 27.338 million barrels, representing 39.99 per cent of total crude oil production or an average daily crude output of 881,885.10 barrels.

Alternative Funding Joint Venture companies accounted for 11.41 per cent of total crude production with 7.804 million barrels of crude oil, an average of 251.736 barrels per day.

Independents/Sole Risk companies produced 3.148 million barrels, representing 4.6 per cent of total production and a daily average crude production of 101.55 million barrels.

According to the NNPC data, Oriental Energy recorded the highest crude production in the marginal fields segment, accounting for 1.33 per cent of the total crude production, which is 911,224 barrels or 29,394.32 average daily crude output.

Midwestern Oil followed with crude oil production of 329,903 barrels of crude oil for the month, representing 0.48 per cent of total crude production. This translates to average daily production of 10,424.46 barrels.

Waltersmith accounted for 0.17 per cent of total crude production with 115,790 barrels of crude, translating to 3,735.16 barrels per day.

Others in the marginal field segment are: Energia — 95,185 barrels; Niger Delta Petroleum Resources — 72.016 barrels; Platform Petroleum —65,568; Pillar Oil —54,679 barrels; and Brittania-U — 1,309 barrels.

According to the report, Movido Exploration and Production Nigeria Limited did not record any production in the month under review.

Paucity of funds

In his reaction on the minimal contribution of marginal fields’ operators to crude production, General Secretary, Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN,  Mr. Bayo Olowoshile, noted that a number of the indigenous investors are financially handicapped.

According to him, the financial challenges faced by the indigenous operators have, over the years, made operators to act as fronts or proxy for foreign investors, who end up buying the assets.

He said, “Oil production is highly technical and capital intensive. And it goes with a lot of risks, especially as it affects the investment layout. More so, access to the colossal amount of funds required for oil and gas business is becoming a big challenge going by the difficult environment that Nigeria poses to investors and financiers from the outside world, who want to partner with the indigenous owners and operators of marginal field.

“This status is compounded by the ongoing actions by the International Oil Companies, IOCs, who are now abandoning and/or divesting with wild excuses of supporting government’s efforts at relinquishing more oil fields to indigenous investors.”

Also speaking, Mr. Debo Fagbami, Chief Operating Officer, Xenergi Limited, explained that funding is paramount for the operators to achieve increased contribution to the country’s crude production.

Vanguard