Mining is one of the most important branches of the Nigerian economy. Last years, oil drilling in the country felt into depression. But Oil & Gas Technology Resource informs, that the oil and gas industry in Nigeria have an opportunity to recover. The trust of major investors may be returned due to a civilized transfer of power in the country to the new president Muhammadu Buhari.
It should be noted, that the proven oil reserves in Nigeria are up to 37 billion barrels, but production is very low because of the difficult situation in the country.
“Bukhari has a reputation as a strong president who finally able to neutralize the threat posed by Nigerian radical Islamist group “Boko Haram”, who controls the north-east of the country. The oil sector is concentrated mainly in the south of Nigeria, but the “Boko Haram” is able to harm the oil infrastructure,” – notes GlobalData analyst Young Okan. According to him, “the new president of Nigeria is also known as a tough fighter against corruption. For example, he recently fired guide state oil company NNPC after a major scandal over the fact of misappropriation of $20 billion in oil revenues.”
The analyst GlobalData predicts that the number of new fields, which will begin to operate in the next five years, will give an additional 300 thousand barrels per day. However, this growth does not look too impressive compared with Angola, which in the same period to increase production to 850 thousand barrels per day.
On a serious stagnation in the oil industry in Nigeria is evidenced by the fact that 335 oil sites in general are not developed, and another 185 – in the Niger Delta – are developed by ineffective barbaric methods and oil is often stolen from there. And this criminal activity is only growing in recent years.
The establishment of peace and order in the Niger Delta – the issue of primary importance for the revival of production and attract direct foreign investment in oil industry. While such problems as financial instability, corruption, crime, radical Islamists aren’t pacified, are not resolved, investors are unlikely to take the risk to invest in the Nigerian oil and gas industry. However, given value of oil reserves in Nigeria, large companies are hoping to restore peace and order in the country.
Last progress in Nigeria situation solving is very promising for the oil industry!