Bloomberg News

Nigeria to Invest $100 Billion in Oil and Gas Exploration

February 24, 2012

(Updates with company comment in second paragraph.)

Feb. 22 (Bloomberg) -- Nigeria, Africa’s largest oil producer, said it plans to spend $100 billion with its joint- venture partners including Royal Dutch Shell Plc, Exxon Mobil Corp. and Chevron Corp. in the next five years to explore for crude and gas onshore and in deepwater fields as it seeks to boost output and increase reserves.

“That’s our investment profile both in the production sharing contracts and joint ventures from now to 2016 and beyond,” Austen Oniwon, group managing director of the Nigerian National Petroleum Corp., said today in an interview in Abuja, the capital. “Joint venture funds will come from both the government and the international oil companies, while the production sharing contracts will be from the contractor.”

The West Africa nation currently has 37 billion barrels in crude reserves and Africa’s largest gas reserves of 187 trillion standard cubic feet, according to the Department of Petroleum Resources, the country’s oil industry regulator. The government missed its targets to boost reserves to 40 billion barrels and output to 4 million barrels a day by 2010.

Nigeria is the fifth-biggest source of U.S. crude imports. Shell, Exxon Mobil, Chevron, Total SA and Eni SpA operate joint ventures with the state-owned Nigerian National Petroleum Corp. that pump about 90 percent of the country’s crude.

The development of deepwater oil fields is well below the country’s potential, Shell said today in an e-mailed statement. Nigeria needs to introduce better investment terms to encourage companies to explore in deep water, Mutiu Sunmonu, chairman of Shell’s Nigerian unit, said today at a conference in Abuja.

Oil exploration in Nigeria has slumped after producers backed away from investment until the country’s petroleum law is passed. The government will present a draft bill for the regulation of the oil industry to the parliament within six weeks, Petroleum Minister Diezani Alison-Madueke said yesterday.

--Editors: Rachel Graham, Dulue Mbachu

To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net Chris Kay in Abuja at ckay5@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net


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