Oil Majors Want FG to Quit OPEC - NNPC
Crude prices fall
By Mike Oduniyi with agency report
Amid increasing global demand for crude oil, the Nigerian National Corpo-ration (NNPC) said yesterday that multinational companies operating in the country's deep offshore region, have continued to pressure the Federal Government to quit the Organisation of Petroleum Exporting Countries (OPEC).
The oil majors, according to the NNPC, were worried about their investments in the deep waters, from which Nigeria expects to raise its oil production capacity by additional 1.2 million barrels per day (bpd) by 2007.
NNPC Group Executive Director (GED) Exploration and Production, Dr. Edmund Ayoola, said yesterday at an international offshore oil conference, that OPEC oil output quota system could prove the main hindrance to rapid development of Nigeria's deepwater resources.
"Nigeria's deepwater operators are continuing to put pressure on the government to either win a higher quota from OPEC or to pull out," said Ayoola.
Nigeria's OPEC official quota is 2.141 million bpd. The country's production has, however, been well above quota, hitting some 2.41 million bpd last month after OPEC allowed its members to over produce in a bid to check rising oil prices.
According to the NNPC GED, the country is expected to bring at least two deep water fields on stream next year and four more in 2006.
Investment in developing new deep offshore fields in the next three years, is put at about $5 billion.
The fields include Shell Bonga field, with capacity of 225,000 bpd and expected to start production mid 2005, ExxonMobil's Erha, East Area Oil, Bosi and Eti,/Asasa fields, with 150,000 bpd, 110,000, 50,000 and 25,000 bpd capacities, respectively and scheduled to go on stream between 2006 and 2007.
Others are ChevronTexaco Agbami field with 250,000 bpd capacity, Total's Usan and Akpo fields with a total capacity of 205,000 bpd, Addax Okwori field which will add 25,000 bpd and Shell's Bonga Southwest with capacity of 145,000 bpd.
Output from the new fields is also expected to be complimented by peak production from offshore and deep offshore fields that came on stream in 2003 and this year, with additional 110,000 bpd.
According to Ayoola, significant deepwater discoveries of oil and gas in the Gulf of Guinea had transformed the region into a potent economic zone that could have a long term impact on the African continent.
The oil majors had actually begun a subtle campaign in 2002, for Nigeria to get a higher OPEC quota. Industry officials said yesterday, that the tight quota had made many wells remain undeveloped, while holding it responsible for the slow response to call for more oil supply.
The issue of Nigeria's continued membership of OPEC will dominate proceedings at this year's annual conference of the Nigerian Association of Petroleum Explorationists (NAPE), officials said.
The Federal Government has on the other hand, maintained that the country will remain in the organisation while pushing for high quota.
NNPC Group Managing Director, Engineer Funsho Kupolokum, had noted early this month at the gathering of Society of Petroleum Engineers (SPE) that Nigeria and Algeria are two OPEC member-countries growing production at faster rate than any other body in the group.
According to him, unless OPEC changed from it's pro-rata quota allocation to something that is capacity reflective, one that mirrors the rate of growth in capacity, there will be problem.
Meanwhile, oil prices retreated from new highs yesterday as the Light sweet crude fell to $47.70 a barrel from a record $49.40 on Friday while the benchmark Brent crude also dropped to $43.52 per barrel.
The drop in prices to the relief, if temporary, of consumers, followed news that oil exports had resumed from southern Iraq after repairs of key pipelines sabotaged last week.
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