NIGERIA’S RISING OIL AND GAS FORTUNES
By Chris Igbojekwe
Monday, June 20, 2005

Nigeria has the largest population in Africa and is the most
populous Black nation on Planet Earth. The 1991 National Census put the country’s population at 88.5 million, with an annual population growth rate of between 2.5 and 3.0 per cent. It is estimated that the country’s current population has gone above 100 million.
The country occupies a land area of 923,769 square kilometres, the largest in West Africa and four times the size of the United Kingdom.
In the Niger Delta, Nigeria has the largest deposit of oil and gas in the West and Central African sub-region. This vital commodity is currently the major source of Nigeria’s gross domestic product, (GDP) government revenue and the nation’s annual foreign exchange income.
Nigeria’s oil and gas industry, growing as it is now, deserves an oil and gas services centre. To all intents and purposes, the concept of an oil and gas service centre, which is yet a novelty in Nigeria, has been fully developed in’places like Aberdeen, and Stavanger, in the North Sea.
It is also the case in Ravenna, Italy, Morgan City, in the Gulf of Mexico and almost all over the world where there is petroleum activity. The essence of this specialised centre is to have a central place where world-class information and technology on all issues concerning oil and gas related matters, can be assessed effectively.
Concerning Nigeria’s rising crude production, this has already been professed by a world-class industry magazine, ‘Offshore Oil and Gas Operations of Penn Wall’, in an earlier report on crude oil production.
This scientific prophecy actually spurred Nigeria to earn an increased OPEC market share recently. Equally, this may have moved the belief that Nigeria’s crude production is rising. NNPC and DPR are aware, as talks have begun with capable multinationals, for exploration. In fact, activities have begun.
The fields are located in OPLs 212, 209, 316 and 216. They are being developed under PSCs with the Nigerian government, through the NNPC. The fields include Shell’s ESCO’s Erha field, ABO field, held by Nigeria Agip Exploration and Agbami field, belonging to star deepwater/Famfa Oil Company.
Agip’s ABO field on OPL 316, is believed to contain over 800 million bbl reserves with 150,000-200,000 b/d Famfa Agbami field in OPL 216 is also expected to produce 125,000 b/d of oil when on stream, with a proven crude reserve of over I billion bbl.
Collectively, the four fields which had commenced production since 2003, will be producing about 890,000 b/d. Bonga field, graciously commissioned by Mr. President late last year, has been confirmed to contain 1 billion bbl. of crude reserves and an estimated output of 250,000 b/d, while Erha field has a potential daily production capacity of 140,000 bbl.
Agbami is on course. Otherwise, two more appraisal wells, Agbami -3 and Agbami –4, were successfully drilled back-to-back, with Transocean Sedco Forex’s drillship. Deepwater Discovery on the huge Agbami structure, paving the way for development of the field.
Agbami is located in OPL 216, in deepwater Nigeria. Texaco is the technical partner (with 40% interest) to the indigenous company, Famfa, which holds the lease. At one billion bbl, Agbami is the biggest field in Texaco’s assets, worldwide. The field development plan for Agbami envisages a floating production storage and off-loading (FPSO) vessel, designed to handle 200,000 b/d and 260 mmcf/d of gas and to store at least, two million bbl. of oil.
No doubt, the plan also calls for deployment of a dry tree planform. Agbami straddles Statoils’s OPL 217, (in which Texaco also has an interest) as well as Famfa/Texaco’s OPL 216. The field is due to come on stream in mid this year, (2005) with output expected to peak at 200,000 b/d in 2007.
One strategic challenge of the growth of oil and gas industry in Nigeria is the place of Free Zone stations. To attract foreign participation in Nigerian oil and gas sector, the Nigerian government is currently working on Free Zone Stations (FZS). An example is the Onne Ports, comprising the Federal lighter and ocean terminal ports located at Onne, (outskirts of Port Harcourt metropolis) 20 miles away.
Onne port as a Free Zone will enable Nigeria to become a focal point for foreign investors not only regarding the Nigerian oil and gas industry, but to also cover the increasing demands of the entire West Africa petroleum market.
Free Zones (FZs) exist in many parts of the world such as Miami (Florida, USA), Batam Island, (Indonesia) and Jabel Ali, (Dubai, UAE) to name only a few.
Oil and gas being the main West African resource, a specialised Free Zone would be based on the oil industry and its associated business sectors. A specialised Export Free Zone would group together industries operating in the different oil and gas sectors:

1. Upstream (exploration and production);
2. Downstream (refining, distribution and marketing) and ;
3. Transit and Supply base and related activities like shipping, air-freighting, transportation, freight forwarding, estate development and others.

In view of our expanding oil and gas fortunes, the target of such FZ is to serve not only Nigeria, but to extend its market potentials to all of the Central and West African economies.
Developing Free Zone with technical reference to oil and gas will boom foreign investment, (in fact FDI) capital flow and technology. Therefore, we will benefit in terms of skills, employment and incomes. Onne port’s key position, in the centre of the Gulf of Guinea, is the perfect logistics location for the Export Free Zone, to serve the West and Central African markets.
Onne is close to Port Harcourt, which is served by an efficient international airport and is a major player and centre of oil firms operating in Nigeria. No doubt, the future of oil and gas is very bright.

• Chief Igbojekwe is Chairman, Shipping Trade Group of Port Harcourt Chamber of Commerce and CEO NBE Oceaneering Ltd., Port Harcourt.