NNPC considers way around OPEC quota restriction

Oct 12, 2004 02:00 AM

Nigeria National Petroleum Corporation (NNPC) and its joint venture partners have established a think-tank to look into ways around the quota restrictions on growing crude oil output imposed by OPEC.
The Nigerian Association of Petroleum Explorationists (NAPE) in collaboration with the American Association of Petroleum Geologists (AAPG) have concluded plans to host an international conference on deepwater exploration and production in West Africa. The think-tank was set up following subtle pressure from the multinational oil companies on government to get the cartel to increase Nigeria's quota in line with growing crude oil output.

But for increases in crude oil prices in the third quarter of the year, Nigeria's efforts to get the cartel to increase its quota had met with a brick wall, prompting calls for Nigeria to quit the cartel, to enable multinationals which had invested huge funds recover cost. However, the government had consistently waded off the pressure, explaining that remaining amember of the cartel was the only way to ensure that the country got the right price for its crude oil output.
Following rising crude oil prices in the international market, the cartel has given the nod for members to produce at full capacity to stem prices, prompting Nigeria to produce about 2.6 mm bpd. While this has checked the clamour for the country to consider pulling out of the cartel, analysts contend that it remains to be seen what will happen when other deepwater field development currently underway, comes on stream.

However, there are indications that given the rising needs of China, India and the United States of America for crude oil, Nigeria may not need to pull out of OPEC to produce at full capacity.
Mr Gilbert Odior, the president-elect of the association and chairman of the organising committee, disclosed that the conference is scheduled to hold at the Sheraton Hotel in Abuja from November 14 to 18. He said the conference will be preceded by a pre-conference workshop in Lagos, entitled "A Decade of Deepwater Activities in Nigeria, Gains, Prospects and Challenges."

The NAPE/AAPG West Africa Regional Deepwater Conference aims to share lessons learnt in the last several years of exploration and production in the countries with coastal basins along the south Atlantic, including Cote D'Ivoire, Nigeria, Equatorial Guinea, Cameroon, Gabon, Sao Tome and Principe, Angola, and northwards in Senegal, Mauritania, Morocco -- "in the hope that we can leverage such knowledge for immediate and future exploration and production of oil and gas in the region," he said.
"The conference is coming at a time when the petroleum world is acknowledging that the largest discoveries of oil and gas in the last five years have taken place in deepwater West Africa. In a nutshell, West Africa is the flavour of the month on the oil patch.

"The conference will be preoccupied with technical challenges in the wider region, the discussions at the pre-conference workshop will centre mainly on Nigeria. Here, the topics will be broad-based and involve more than geologists and petroleum engineers.”
“Participants from the oil industry, the banks, the legal circles as well as industries, will look at how Nigerians, Nigeria and her partners, have benefited and still hope to benefit from investment in deepwater since the first set of tracts were awarded in 1993. Issues such as fiscal strategy, local content, and indigenous participation will be treated along with technical challenges. The communiqué from this multi-stakeholder workshop will be handed over to President Olusegun Obasanjo on the opening day of the conference proper, on November 14, 2004 in Abuja."

Mr Odior pointed out that the NAPE/AAPG West Africa Regional Deepwater Conference is the first such major collaboration between a local body of oil and gas professionals with the largest society of earth scientists (AAPG) in the world.
"More than 2,500 delegates are expected at the five-day event. An average participant will spend seven days in Nigeria, of which four are for the conference proper. The conference will feature 150 oral and poster presentations in 20 technical sessions and has earmarked a day for roundtable discussion of strategy and Impact of oilfield activity on Global economies by ranking executives of major companies operating in the region."

He also disclosed that delegates are expected from countries with coastal basins jutting right on the Atlantic: South Africa, Namibia, Angola, Nigeria,, Equatorial Guinea, Gabon, Ghana, Cote d'Ivoire, Mauritania and Morocco, as well as Brazil and the United States of America.
"AAPG is collaborating with NAPE in part because the latter is its major affiliate in West Africa, but more importantly because Nigeria is the most significant oil producer along the Gulf of Guinea.

"The West African deepwater play is the most successful exploration play in the world in the last 10 years. More than 10 bn barrels of oil have been discovered in the deepwater segment of the six basins that lie the Atlantic Coast from Mauritania in the North to Namibia in the Southwest and Nigeria alone has contributed more than 4 bn barrels.
"The success of deepwater exploration has led to commitment of more than $ 1 2 bn of worth of field development in Nigeria alone in the next five years. Insights into the technological challenges of producing these fields are part of the lessons to be captured at the conference.”

Source: Vanguard
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