Nigerian CommunicationWeek

Marginal Field Operators Warn of Crude Oil Production Crash

Mrs. Diezani Alison-Madueke, minister of Petroleum Resources

Crude theft may wreck the marginal field operation in Nigeria’s multi-billion dollars oil and gas industry if nothing urgent is done, operators of the marginal fields cried out on Monday.

18 of the 24 marginal fields awarded before 2007 are not producing as at today, and operators of these fields who are indigenous players said at the pre-conference workshop of the 31st Annual International Conference of the Nigerian Association of Petroleum Explorationists (NAPE) that some of the six fields on production are being seriously hit by crude theft.

Abdulrasaq Isa-Kutepa, chief executive of Walter Smith, an operator, said in a paper at the pre-conference that his small company had lost $50 million between January and November, 2013 to shut down of Trans Niger Pipeline (TNP) due to crude theft.

“Our production figures are hampered by crude oil theft. We had production shut down of 120 days in 2012 due to this challenge. In this 2013 we already lost 120 days.

“As I am talking to you we are not producing due to the shutdown of TNP. We lost almost $50 million this year to this persistent shutdown of TNP,” he said.

Corroborating Isa-Kutepa’s view, Uju Ifejika , CEO of Brittania U, operator of Oil Mining Lease (OML) 90, , said as that was not enough trouble, banks are holding back funding for developing the marginal field, which is partly responsible for the poor performance of marginal fields operation.

“It is a thing of shame that Out of the 24 fields that are marginal only, six to seven (onshore) are producing. The worse scenario is the bid round of 2007. Out of this one no single marginal field awarded in 2007 is producing.”

Reacting to this submission, Ladi Balogun, CEO of First City Monument Bank, said banks find it difficult to finance projects with nothing to show in terms of exploration.

According to Balogun, who was represented by Akeem Adedeji, “it is only the 10 per cent equity in the loan assets that is being owned by the bank, the remaining 90 per cent is owned by the deposits who you, as a bank, must pay back their deposits at the end of the year with interests.”

Exit mobile version