Indigenous Firms Spoil To Join Oil Majors’ League

Given the right fiscal and legislative frameworks, with support from international oil companies (IOCs), some indigenous oil and gas exploration and production companies are sure to join the five major IOCs as big time players in the oil and gas industry in Nigeria, soon.

The five majors are Shell, ExxonMobil, Total, Chevron and Agip.

The Managing Director of Chevron Nigeria Limited, Andrew Fawthrop, expressed this optimism while presenting a paper titled,” Offshore/Marginal Field Development: Challenges, Opportunities, and Prospects for the Future”, at the just concluded Oloibiri Lecture and Energy Forum, an annual lecture series organized by the Society of Petroleum Engineers in Lagos, recently.

Fawthrop reasoned that though the production and reserve levels of indigenous companies were low because most of them were operating marginal fields with production levels as low as 2,000 and 10,000 barrels per day, but noted that with appropriate fiscal regime and legislative provisions, the firms could grow to compete with the major oil and gas companies.

According to him, “today, there are only 30 producers. There are probably 150 oil companies in Nigeria. In the future, I see one or two indigenous companies joining the big five IOCs. I see several other indigenous companies growing to the 50,000-100,000 barrels of oil per day size.”

The Chevron chief said a number of small producers would grow fast, projecting that the list of companies in the next 10 years would certainly not be the same as multiple service providers would grow to material sizes and a larger number of suppliers available will hit the producers’ chart.

He said there were opportunities for indigenous oil exploration and production companies to grow as the changes going on in the industry are aimed at turning the acreages to indigenous firms even as legislation is being debated to enable and enhance local opportunities in the critical sectors of the industry.

Fawthrop advised local companies to leverage on partnerships to build financial strength in order to develop their potentials to harness maximally, the fields as the IOCs are there to offer the technical and operational support needed to drive the industry to a capacity and capability level to propel the economy to the next level.

With the planned lower taxes on indigenous firms as well as the attractive fiscal regime in the Petroleum Industry Bill (PIB) before the National Assembly, Fawthrop said, he believes that local oil firms could grow from small to medium to big size oil companies, and thereby increasing their capacity to create more jobs, and boost wealth and economic viability in the land.

It would recalled that some fields transferred to indigenous oil and gas firms by Chevron include Oghareki, Aro, Yorla South to National Petroleum Development Company (NPDC), an arm of the NNPC, Ajapa field to Britannia, Akepo field to Sogenal, Ogede field to Bicta Energy, Ororo field to Guarantee/Owena, Oriri field to Goland Petroleum, Ke field to Del Sigma, and Dawes Island field to Eurafric, among other producing assets located in a couple of oil mining leases(OMLs).

Vivian-Peace Nwinaene