In response to the U.S. stopping its LNG imports, Nigeria must adapt by seeking other markets for its LNG as well as concentrating on exploring its unconventional gas and oil resources.
“The growth in unconventional will ultimately transform the economy of Nigeria from rent-seeking, rent-sharing, and hard-currency driven economy to a value added prone economy,” Wumi Iledare, president of International Association for Energy Economics (IAEE) said yesterday.
On Wednesday, Nigerian Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, announced that the United States has stopped the importation of crude oil from Nigeria, a move resulting from ramped up exploration of domestic shale resources in the U.S.
Mrs. Alison-Madueke argued that “the global economy is changing and Nigeria must adopt sustainable economic strategy. I know many of you must have heard of the shale gas and the shale oil revolution. This has literally knocked out Nigeria from the export to the USA. So, Nigeria must adapt. We must change our ways and policies that we may hold dear which may cause us economic stress in the future. So, this market called the shale oil and gas has resulted in Nigeria seeking new markets for its oil.”
She called for the urgent adoption of the Petroleum Industry Bill (PIB) which would remove the uncertainty in the sector that stakeholders said was hindering investments, as well as foster job creation, and limit pollution and emissions from gas flaring.
A Vice President of Nigeria Labour Congress (NLC), Mr Issa Aremu noted that if the bill becomes law, it could culminate in the creation of 19 fresh companies from the unbundling of the Nigeria National Petroleum Corporation (NNPC).
Igwe Achese, the President of The National Union of Petroleum and Natural Gas workers (NUPENG) also argued for the speedy passage of the bill, saying: “We urge government to pursue vigorously the passage of the PIB bill at the National Assembly before discussing the division and new business model for NNPC. We do not want the Federal Government to unbundle NNPC before the passage of the Petroleum Industry Bill (PIB),”
Nigeria is Africa’s largest oil producer, with a current output of around 2.0 million b/d. However, according to data from Nigeria’s National Bureau of Statistics the country’s exports to the US (dominated by crude oil) fell from 40 per cent to 12.5 per cent of total exports over the period of the last five years.
The country has seen its reserve base decline from 37 billion barrels to 35 billion barrels, according to the Department of Petroleum Resources (DPR). The reason for the decline is believed to lie in little or no significant investment in oil exploration in the last five years. Oil wells completed in Nigeria, which include development and exploration of oil and gas wells, dropped from 124 in 2011 to 107 in 2012, according to the Organisation of Petroleum Exporting Countries (OPEC) annual statistical bulletin 2013.
Exploration activity levels are at their lowest in a decade and only three exploratory wells were drilled in 2011 in the country, compared to over 20 in 2005, according to the Energy Information Administration (EIA).
The Petroleum Industry Bill (PIB) has been stuck in the parliament for more than six years now.
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