NNPC, Chevron tie investments in oil sector to fiscal regime
The Nigerian National Petroleum Corporation (NNPC), and oil major, Chevron Nigeria Limited (CNL), have identified appropriate fiscal regimes and regulatory framework as critical elements that will attract the needed investments into the sector.
The stakeholders, at the 36th International Conference and Exhibition of the Nigerian Association of Petroleum Explorationists (NAPE), in Lagos, noted that the approach will drive investments in exploration and improve recovery technologies to organically grow reserves in Nigeria.
The NNPC said, for instance, fiscal regimes for inland basins should be different from those of matured basins, adding that such provisions would encourage more investors to come on board.The Group Managing Director, NNPC, Dr. Maikanti Baru, represented by Victor Adeniran, Chief Operating Officer, NNPC Ventures, Autonomous Business Unit, said there is a need for the Department of Petroleum resources (DPR) to implement the right fiscal provisions for identified projects.
Similarly, Chevron Nigeria said more exploration activities to find new resources and increasing reserves from discovered assets, would help in growing Nigeria’s overall hydrocarbon reserves.
The General Manager, Asset Development and Exploration, CNL, Kunle Adeyemo, said Nigeria has a rich basin with several discovered and yet-to-be-discovered hydrocarbon resources.
On leveraging technology to unlock small fields development, especially stranded assets, he said Chevron has been at the forefront of adopting Real Time Reservoir Management techniques, which enable timely access to surveillance data and facilitates optimisation to improve recovery and reserves. He added: “These techniques are feeding into our efforts on digital transformation to enhance asset value, increase production and reserves
“Small pools in shelf and deepwater with marginal economics could be developed by adopting appropriate technology to lower overall development cost. Chevron has been at the forefront of adopting such technologies such as: use of unbonded flexible pipe to reduce pipeline installation and lifecycle costs, long distance tie backs to existing facilities, tailor-made gas lifts, dump flood (powered /un-powered) in assets further away from gas lift or water injection infrastructure.’
Commenting on NAPE 2018 theme: “Evolving Strategies for a Sustainable Petroleum Business in a Fluctuating Oil Price Regime,” Adeyemo said the call for organic growth in the Nigeria’s oil and gas industry was apt at this time, given the need to increase the reserves/resources to respond to the growing demand for energy, and join in the discourse on appropriate energy mix for the future.
“The means for Nigeria to organically grow her oil and gas resources to the aspirational target, we need to explore to find new resources and increase reserves from discovered assets. These categories exclude ‘acquisition’, which some other countries have employed to ensure access to long term energy supply,” he said.
He said the reserves/resource volumes were very well dependent on the recovery mechanism employed, coupled with other geologic factors, reservoir/fluid properties and size of the asset, adding that several operating fields in the Niger Delta were operated under Natural Depletion Mechanism, which yields less than 30 per cent recovery factor or up to 50 per cent, if there is strong aquifer support.
Adeyemo explained: “A large percentage of the wells in the Niger Delta are produced naturally against gravitational forces and flowline back-pressure, unassisted with external lift forces. The opportunities to organically increase resources from such assets include: extend the infrastructure for secondary recovery techniques in existing and new fields; improve use of artificial lift such as gas lift and Electric Submersible Pump (ESP) where applicable to improve vertical lift; and enhanced oil and gas recovery techniques presents a promising avenue for long-term reserves growth.”