Nigeria requires $ 10 bn investment annually in oil and gas industry

Nigeria will require an investment of $ 10 bn annually in the coming five years to meet the country's target for oil reserve of 40 bn barrels by 2010 and the elimination of gas flaring by 2008, a senior official has said. Of this amount, the joint venture operation will require about $ 7 bn while the Production Sharing Contract (PSC) operators in the deepwater area will make up for the balance, Director of the Department of Petroleum Resources (DPR) Mac Ofurhie said.
"I expect average oil and gas spending to peak at about 10 bn annually over the next five years, $ 7 bn per annum by the Joint Venture Operations in the onshore and offshore water, and $ 3 bn by the PSC operators in the deepwater, " Ofurhie was quoted as saying.

He said that the government had set an ambitious target for boosting local content participation aimed at achieving 45 % local participation specifically in the provision of goods and services to the oil and gas industry by 2006, and expected that this would ultimately rise to about 70 % by 2010.
"To this effect, a local content committee has been set up... in the fashioning of legal and regulatory framework for fast- tracking, improved local participation and acceleration of the use of local materials," he said.

Ofurhie said that Norway had agreed to assist Nigeria in identifying the modalities with which to build local capacity in the provision of goods and services, especially in local engineering, construction and fabrication for the oil and gas.
In addition, the government had signed a Memorandum of Understanding with the China National Oil Corp. to identify suitable upstream oil and gas assets that would be integrated into the downstream projects including refining, power generation, petrochemicals and fertilizer in partnership with local industry players, he added.

Nigeria is Africa's largest oil producer with an estimated oil reserve level of 34 bn barrels currently, and also a gas-rich country, which is reportedly enough to power the rest of Africa for centuries.