Deepwater projects may boost Nigeria’s oil reserves by 2.3bln barrels: S&P

Staff Writer, ZAWYA

Oil barrels floating, computer illustration. Getty Images Image used for illustrative purpose.

Nigeria’s new deepwater projects will add nearly 2.3 billion barrels to the country’s existing crude reserves when they come on stream between 2025 and 2030, according to a recent S&P Global Commodity Insights report.

Deepwater projects hold the key to Nigeria’s production growth and stability, the report said, adding that the Petroleum Industry Act (PIA) can help to transform the fiscal side of the nation’s oil industry.

Likewise, the deepwater projects can provide extra production required to offset the expected production decrease.

“Unsanctioned deepwater projects are seen as the prime target area for fiscal and regulatory improvement, which is thought to have occurred if the assets convert to the new PIA fiscal terms,” the report noted.

Large projects that are key to steady Nigerian production are the deepwater producing Agbami and Erha fields, as well as the upcoming deepwater Bosi Phase 1 development. 

These increases are significant and illustrate the government’s intentions moving forward that offering fiscal attractiveness at the forefront.

The trajectory of Nigeria’s future oil and gas production largely hinges on the PIA and if it is considered to be sufficiently favourable to investors, S&P stated.

However, the report said it remains to be seen if Nigeria’s boldest attempt to overhaul its petroleum sector will work, stressing that it has been a positive step and should help retain and attract further investment.

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