Data analytics firm, Global data, says 28% of capital expenditure in Nigeria’s petroleum industry in the next three years will be spent in ultra-deep depths. The value of funds expected to be spent on projects which go below m1,000, is estimated at $7.2 billion.
The first ultra-deep project to come into stream is the Total operated Egina offshore project.
The block is at a depth of m1,500. The key regulation of offshore activities in Nigeria- is the Deep Offshore and Inland Basin Act 1999. This act prescribes no royalty for projects that are at depths of m1,000 and below. Shallow water projects are expected to gulp 26%, which is valued at $6.2 billion. Deepwater and onshore projects are expected to gulp $6.0 billion.
Between 2018 and 2020, an average of $8.4 billion will be spent on 249 oil and gas fields. The value of total capital expenditure expected to come into the oil and gas sector in the next three years is an average of $25.3 billion.
Nigerian National Petroleum Corporation is expected to make the highest investments with a capital expenditure of $5.3 billion into the country’s upstream projects by 2020. Royal Dutch Shell Plc and Eni SpA will follow, with $4.7bn and $2.8bn respectively, Global Data writes.
Zabazaba-Etan Project, a proposed shallow water conventional oil field, will get investments of $4.8 billion between 2018 and 2020. The block will be operated by Nigerian Agip Exploration Ltd. A conventional oil field in the Niger Delta Basin, Owowo West, has a cap expenditure of $1.8bn.
Esso Exploration and Production Nigeria Limited will run the field.
Analysts say with a $7.2 billion investment coming into depths where Nigeria gets no royalty at the moment, the need to pass into law- the recommendations of the Petroleum Fiscal Policy and the Petroleum Industry Fiscal Bill is more pronounced.