Despite the significant exploration and production of shale oil in the United States, some stakeholders in the oil and gas industry have allayed fears over prospects of crude oil export in West Africa.
The Chief Executive Officers of Oyster Oil and Gas, Michael Wood, Vanoil Energy Limited, Canada, Sam Malin, and South Atlantic Petroleum Limited, Lagos, Martin Trachsel, stated that the US shale revolution will only boost production temporarily, expecting oil prices to remain high.
Besides, these companies have signified interests to take up divested assets in the Nigeria oil and gas sector.
Already, the companies have signified their interest to invest in some divested assets in Nigeria’s oil and gas sector.
The consensus in the industry was that shale resources could push long-term oil prices down, threatening crude oil export to the US.
Wood stated: “I am positive and I believe there is no cause for alarm in respect of the shale boom in the United States. I think the whole of the supply side is in transition. I believe that time will tell whether the US shale reserves are really technically and economically sustainable. This is because it is already costing the US companies a great deal of money to explore the conventional oil and gas and sustain production.”
He said that the huge oil and gas reserves in West Africa have put the sub-region at an advantage against the US shale. “One good thing about Africa is the huge oil and gas reserves that are yet to be tapped. There are huge basins in the deep waters of Nigeria and Angola. Economically, Africa oil and gas remained more viable”.
Wood disclosed that the company has signified interest to invest in exploration activities in Nigeria by taking up some divested assets by multinational oil and gas companies.
He said: “We were in Nigeria last week to take on exploration projects. We do frontier exploration. If we end up going to Nigeria, which is a much matured oil and gas industry, we will like to work with local partners and put together partnership that works “.
Malin said that shale oil has not affected the oil and gas export market with the significant exploration of US shale. “Shale is only having little impact on gas prices only in the areas where gas is exploited in the US but the crude oil prices may not be affected.
“There is growing demand for gas and I don’t think it will result to crash in gas prices. Nigeria has quality crude oil and there is opportunity to look out for new markets. There is no pressure on export at the moment”.
Speaking on the company’s proposed investment in Nigeria, Malin disclosed that Vaniol has declared its intention to bid for Shell’s divested assets. “We are among the companies is are bidding for Shell’s assets”.
Speaking on the challenges of operating in Africa, he said: “Political instability and unfavourable government policies remained a challenge in many African countries where we have operation.
“For example, many companies are waiting for the PIB to be passed into law soon. We hope its content encourages indigenous operators in Nigeria. The indigenous companies are also hoping for fair return on investment just like the multinationals.
Trachsel advised Nigeria and other West Africa crude oil exporting countries to look out for new market opportunities as the shale boom will not last forever.
Meanwhile, Total Oil will be drilling an exploration well off the coast of South Africa in 2014 in a new phase of exploration that is also targeting Kenya and the Ivory Coast, a senior company official said on Wednesday.
The company’s General Secretary for Africa, Abiodun Afolabi said during the conference that Total has emerged the operator of a South Africa oil block which covers an area of about 19,000 sq km and “where we will drill next year our first exploration”
Afolabi said that South African authorities had also granted permission to convert a technical cooperation permit on another block, Outeniqua South, where the company hopes to shoot 7,000 km of 2D seismic data.
He said Total is aiming for a production target of three million barrels of oil a day by 2017, with deep-water production in Africa a key driver.
“We expect to see an increasing proportion of the operated production in Africa coming from the deep offshore, (which) has risen steadily from 34 per cent in 2006 to 72 percent in 2012,” Afolabi said.
He added that Africa accounts for approximately a third of the group’s hydrocarbon production, with Total also supplying about 15 per cent of the continent’s downstream market, some 14 million tonnes of petroleum products a year.