Indigenous firms achieve great feats in oil exploration, production
Indigenous companies are beginning to develop capacity to compete with International Oil Companies (IOCs), which have dominated the exploration and production of oil and gas in Nigeria for decades.
ExxonMobil, Chevron, Total, and Shell, are some of the IOCs that partner with the Nigerian National Petroleum Corporation (NNPC), in the exploration and production of oil from some of the large fields in the Niger Delta with the capacity to produce several hundred thousand barrels of oil daily.
But the dynamics are fast changing as indigenous players gear up to wrest control of Nigeria’s upstream oil and gas industry from the majors.
Interestingly, these indigenous companies have proved their mettle by scaling up production capacity significantly over the past five to seven years.
They have made rapid gains on their IOCs counterparts in terms of technical expertise and finance capability.
Seplat, Oando Plc, Nestoil, Newcross Petroleum Limited, and Aiteo, are some of the indigenous players that industry analysts observe with keen interest.
Seplat Petroleum Development Company Plc, currently produces about 50,000 bpd of crude oil and currently supporting government on completion of the Amukpe to the Escravos pipeline.
Similarly, Oando Energy Resources (OER), had an average production of 43,503 barrels per day during the last quarter of 2016.
Also, Energia Limited, another indigenous oil firm, which is equally doing great in crude oil production.
Nestoil is a force to be reckoned with in Engineering, Procurement and Construction (EPC) services, just like its counterpart Newcross Petroleum Limited (NPL).
However, industry pundits observe that Aiteo is tipped to be one of the major players in the industry going by its antecedents.
The company discovers, produces, stores and delivers energy resources to marketplaces worldwide, and is currently working on developing energy resources in some of the world’s most significant basins.
Companies such as Aiteo, Eroton and Newcross collectively produced up to 200,000bpd in the 4th quarter of 2016.
Oil and Gas analyst, James Udeme, who tracks developments in the industry for one of Nigeria’s foremost financial institutions, observed that some indigenous operators have been able to raise capital to acquire seemingly marginal assets from IOCs and have maintained production levels.
“Local operators have even been able to poach top talent from IOCs and are excellently run. This has contributed positively towards increasing the percentage of Nigerian production coming from local operators,” he added.
An Economist, Patrick Atuanya, is optimistic about the prospects of indigenous players, particularly their tenacity in the face of challenging macro-economic headwinds.
He identified Aiteo as one of the fast rising indigenous players, considering that the company only just began full operations in May 2015. Within that timeframe, it won the bid for the 45 per cent total interest in OML 18, previously held by oil majors – Shell Petroleum Development Company (SPDC), Total E&P Nigeria Limited, and Nigerian Agip Oil Company Limited.
He stated: “It’s a remarkable feat for any indigenous Nigerian firm to be growing oil production amid the downturn in oil prices. Most majors have cut capex and written down the value of or sold assets for those heavily indebted. With indigenous firms accounting for approximately 12 per cent of Nigeria’s 1.8million bpd total oil production, it means Aiteo Group is responsible for some 42 per cent of total indigenous production.”