Earlier this year a study was published in the Journal of Experimental Psychology (published under the American Psychological Association) that found hypnosis can have profound effects on executive function – the cognitive processes that regulate our goals as well as the thought processes and actions oriented towards achieving those goals.
The Nigerian oil and gas industry dates back to 1958 when oil was first discovered by Shell D’Arcy at Oiloibiri field in the Eastern Niger Delta Basin in the present day Bayelsa State. However, oil prospecting activities go back to 50 years prior to that following exploration operation of a German Company, the Nigerian Bitumen Corporation (NBC), in the Araromi area of the present day Ondo state.
The operation, based on the Mineral Survey of Southern Nigeria, resulted in the drilling of 16 shallow boreholes (4.9 metres) on a line of oil seepage now known as the tarsand belt. The report had indicated the occurrence of tarry sand (oil sands) in parts of Okitipupa structure (Eastern Dahomey) Benin Basin.
This encouraged NBC to drill 15 wells along the onshore area of the basin between 1908 and 1914 following the striking of crystalline basement at relatively shallow depths, which established the presence of several horizons of oil sands, setting the stage for subsequent oil exploration operation in Nigeria.
Shell Oversees Exploration Company, in collaboration with Shell D’Arcy Exploration Company, continued exploration activities between the two World war periods, with geological and reconnaissance and geographical surveys in selected areas across the country in 1937.
In 1938, Shell D’Arcy was granted oil exploration license (OEL) by the Colonial administration to carry out exploration activities throughout the country. Between 1951 and 1959, the company, in partnership with Shell BP, had drilled six wells in the Benin Basins.
The first deep test in 1951 (Iho-1 NW) of Owerri into Cretaceous sands on the Northern fringes of the Niger Delta Basin was not successful. By 1955, some 15 dry holes were drilled into Cretaceous prospects with no real oil finds.
However, encouraged by the first oil show in the tertiary Niger Delta Basin (Akata-1 well) drilled in 1953, Shell intensified its search in the basin, and in 1956 made the breakthrough that has come to represent its pioneering success story in oil exploration in Nigeria.
The significant find in Oloibiri focused the search on the Niger Delta Basin, setting the trend in oil exploration in the country. Nigeria’s first oil shipment of 5,000 barrels to the international market was in 1958.
In 1959, Shell Bp relinquished portions of its onshore license, allowing a number of other oil majors to be granted similar licenses to explore for oil in Nigeria. The Benin Basin was further explored in the 1960 and 1970s due to the surface evidence presented by the oil sands and heavy oil.
Those granted the initial license in 1961 to explore for oil in Nigeria included Shell BP, Gulf Oil, Mobil and Texaco. The first offshore production began in 1965 with the discovery of oil in Okan field by Gulf Oil Company, which confirmed Niger Delta Basin as having significant prospects as a world-class hydrocarbon province. Since then, more than 500 oil and gas fields have been discovered, with more than half currently producing at onshore locations.
Nigeria joined the Organisation of Petroleum Exporting Countries (OPEC) in 1971, and in 1977 established the Nigerian National Petroleum Company (NNPC), a state owned and controlled company, which is a major player in both the upstream and downstream sectors.
By the late seventies, Nigeria had attained a production level of over 2 million barrels of crude oil a day. Although production figures dropped in the eighties due to economic slump, 2004 saw a total rejuvenation of oil production to a record level of 2.5 million barrels per day. Current development strategies are aimed at increasing production to 4 million barrels per day in the near future.
The dominant role of petroleum production and export in Nigeria’s economy has pushed agriculture, the traditional mainstay of the economy, from the early fifties and sixties, to the background.
Industry Overview
From the modest beginning, the industry has grown today to account for more than 90% of the country’s gross foreign exchange earnings and over 40% of the country’s gross domestic product (GDP). The oil and gas industry is the backbone of the country’s national development plan.
Nigeria is reputed to be a predominantly natural gas province with a little oil. Natural gas reserves are known to be more than ten times the volume of the crude oil reserves. With proven crude oil reserves estimated at over 37.2 billion, the country’s natural gas reserves is estimated at about 189trillion standard cubic feet, with a daily production capacity of associated gas (AG) put at more than 13billion standard cubic feet. Nigeria is recognized among the world’s eight largest hydrocarbon reserves. The oil reserve is equivalent to 42.4 years of current production and 2.68 % of the world’s reserves.
Currently, the country’s daily production capacity stands at an average of 2.3 million barrels, including condensate, which is not always considered in the production quota allowed by Organisation of petroleum Exporting Countries (OPEC).
There are indications that the country has potentials to exceed its reserves in the near future, but its daily production capacity is currently limited by OPEC quota reductions. As a member of OPEC, Nigeria’s oil production fluctuates in line with the group’s response to world oil supply.
To date, there has not been any deliberate policy to promote dedicated exploration for natural gas. The bulk of the natural gas produced in the country so far is associated gas (AG), which were discovered and produced in the course of exploration for oil by the multinational and indigenous exploration and production (E&P) companies operating in the country.
The new industry strategy is to collect the associated gas and process it into liquefied natural gas (LNG), greatly enhancing Nigerian natural gas revenues while simultaneously reducing carbon dioxide emissions
Most of Nigeria’s crude oil production, comprising 10 major crude streams (including condensate), is Bonny light sweet crude, American petroleum Institute (API) grades 21-45, with a low sulphur content. Nigeria’s marker crudes on the international oil market are Bonny Light and Forcados.
Industry Potentials & Aspirations
The oil and gas sector has potentials to impact on three key levers of the GDP growth, namely
• Attracting fresh investments to boost oil production capacity growth and increased gas utilization
• Stimulation of local labour and capital through cross sectoral linkages in national content initiative, ethanol development initiative and gas-to-power supply projects development
• Institutional reforms and efficient industry through a comprehensive upstream and downstream industry restructuring and reforms in gas development strategies.
However, the Federal Government’s aspirations include:
• Grow the country’s reserves to about 40 billion barrels
• Increase the production capacity to about 4.5million barrels per day
• Grow the domestic economy through effective utilization of the huge natural oil and gas resources
• Reposition the oil and gas industry to maximize deliver value to stakeholders and economy
• Ensure that natural gas contributes significantly to the country’s revenue earnings
• Ensure that domestic gas utilization grows above the level of subsistence
• Create new industries out of the old oil industry
The national aspirations align with global energy needs focusing on delivering significant capacity additions in crude oil as well as grow the gas sector such that additional gas capacity is delivered to the economy. Since 1996, over 10billion barrels of oil and 34trillion cubic feet of gas have been discovered deep offshore.
The Petroleum Industry Bill (PIB) was a product of the Oil and Gas Reform Implementation Committee (OGIC) constituted by the Federal Government in 2000 charged with the responsibility of undertaking a comprehensive reform of the country’s oil and gas industry.
For more than 50 years the industry has been in operation, the main laws regulating the operators have not undergone a comprehensive review to align with modern realities and international best practices. The Petroleum Act 1969 (as amended); the Petroleum Profit Tax (PPT) 1959 (as amended) and the Nigerian National Petroleum Corporation (NNPC) Act 1977 (as amended) are practically outdated, and need to be updated to reflect the changing dynamics of the global industry.
The PIB is therefore a reform legislation designed to review and harmonise several pieces of legislative and administrative instruments as well as directive principles into one holistic legal document that clearly establishes defined rules, procedures and institutional framework for the effective administration of the country oil and gas industry.
The PIB would stipulate the legal and regulatory framework, institutional and regulatory authorities for the country’s oil and gas industry as well as spell out operational guidelines for every activity in the upstream, midstream and downstream sectors of the industry.
The PIB would consolidate about 16 different laws into a single document.
