Key points
- Indigenous operators say ageing oil assets acquired from IOCs require significant investment to restore production.
- Industry leaders identified drilling, facility rehabilitation, infrastructure upgrades and technology adoption as priorities.
- Oando says Nigeria is producing below its technical capacity despite abundant resources.
- Shoreline Group estimates strategic investment could unlock about 300,000 barrels of additional daily production.
Main story
Nigeria’s indigenous oil producers have said the transfer of major upstream assets from International Oil Companies (IOCs) presents a significant opportunity to boost crude oil production, provided substantial investments are made to rehabilitate ageing infrastructure.
Speaking during a panel session on production optimisation at the 25th Nigeria Oil and Gas (NOG) Energy Week in Abuja, industry leaders said many of the divested assets still contain considerable reserves but require fresh capital to restore productivity.
They identified new drilling campaigns, rehabilitation of ageing facilities, improved evacuation infrastructure, technology deployment and stronger technical capacity as critical to increasing output from the acquired fields.
The operators noted that indigenous companies now play a central role in Nigeria’s upstream sector and would be instrumental in achieving the country’s production targets.
Chief Executive Officer of Oando, Dr Alex Irune, said Nigeria’s biggest challenge was not resource availability but maximising existing production capacity. According to him, the country is currently producing only about 70 per cent of its technical potential and should focus first on protecting current output levels while pursuing future growth.
He added that recent industry reforms had improved the operating environment but stressed that sustained investment and collaboration among operators remained necessary to reverse production decline.
Chairman and Chief Executive Officer of Shoreline Group, Kola Karim, also said the acquired oil fields could deliver significantly higher output through strategic investments in drilling, subsurface development and infrastructure upgrades. He estimated that the assets hold the potential to add about 300,000 barrels of daily production.
The issues
Nigeria’s push to increase crude oil production increasingly depends on indigenous operators following the divestment of onshore and shallow-water assets by international oil companies. However, many of these mature fields require substantial investment and modernisation to sustain production and maximise their remaining reserves.
What’s being said
“Nigeria’s production challenge is not a lack of resources but the inability to maximise existing capacity.” — Dr Alex Irune, Chief Executive Officer, Oando
What’s next
Operators are expected to accelerate investment in drilling, infrastructure rehabilitation and technology deployment as they seek to increase production from the acquired assets and support Nigeria’s oil output ambitions.
Bottom line
The success of Nigeria’s indigenous upstream sector will depend on how quickly operators can invest in ageing assets, improve efficiency and unlock additional production from existing fields.
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