With the latest indices, there are indications that Nigeria may lose $2.7 billion revenue from three deep offshore fields due to changes in tax and royalty laws as well as other uncertainties in the petroleum industry.
According to a latest research by a United Kingdom based oil and gas consultancy firm, Wood Mackenzie, it indicated that rising production cost and uncertainty in the country’s energy sector could lead to a 35 percent decline in oil output over 10 years as companies delay investments in key oilfields.
In its findings the company warned that three deep offshore fields, which would generate $2.7 billion a year for the government at peak production, are likely to be delayed as companies put their money in regions with better and clearer terms.
Koch, principal analyst of sub-Saharan Africa upstream with Wood Mackenzie, said, “Nigeria is going to enter quite a steep decline in production. In order to keep its revenue up, it needs to develop additional fields.”
Nigeria is Africa’s largest oil exporter, with output close to two million barrels per day (bpd), but it needs continual investment to maintain output as fields naturally decline.