An Ultra-Deepwater Oil Platform

A research body Global data has released capital investments projection for  Nigeria for the next three years indicating that about $25 Billion is projected to be invested in the Nigerian economy by three key oil and gas players. The oil companies are led by Nigerian National Petroleum Corporation NNPC who is likely to invest about $5.3 billion into the economy by 2020. Others are Royal Shell with investment estimates of $4.7bilion and Eni with an investment projection of $2.8billion.

The three oil and gas giants are expected to dictate the pace in offshore oil and gas investments in Nigeria in 2018-2020. It was observed by the global research firm that the signing of a part of the Petroleum Industry Bill PIB by the Nigerian National Assembly would eventually help unlock vast untapped investments opportunities amounting to over $200 Billion.

A breakdown of the estimated investment platform reveals that ultra-deepwater oil and gas projects will gulp $7.2 billion representing over 28% of total anticipated investments. Shallow water projects will take over $6.7 billion or 26%, deep water will account for $6.0billion whilst onshore projects will gulp $5.5 billion.

Leading the projected investments is a planned shallow water conventional oil field being operated by Nigeria Agip Exploration Ltd, ZabaZaba Etan project will lead the capital investment with $4.8 billion.

Another capital investment will be the witness in the Owowo west oil field where Esso Exploration and Production Nigeria limited is set to invest over $1.8 billion in the oil field located in the Niger Delta basin.

The total projected future capital investments per barrel of oil equivalent BOE in Nigeria are estimated to be $11.2 dollars for ultra-deepwater projects. $9.7 for deepwater projects while shallow water and onshore projects will have capital expenditure per barrel of oil equivalent CAPEX/BOE of $7.0 and $3.3 dollars respectively. The average CAPEX/BOE for Nigeria oil investments is projected at $6.7 dollars.

According to Jessica Brewer, a Principal Analyst at Wood Mackenzie a research and analysis company “Brownfield developments are popular in the current capital-constrained environment, with less spend and execution risk than a greenfield project, and a faster route to the first production. Both investors and operators want to see faster cycle times and quicker returns on upstream projects.

“We should continue to see operators favouring a ‘leaner and meaner’ path in 2018. At the beginning of the year, we selected 30 projects we thought were most likely to make FID, and they follow many of the trends we saw emerge in 2017. Average CAPEX continues to fall – averaging only US$2.2 billion – while CAPEX/BOE is now only US$4.9/boe, versus US$11.3/boe back in 2011.”