Angola may over take Nigeria, sub-Saharan Africa�s leading oil producer, in the next few years, Business Day has gathered.
Already, an internal progress report drafted in January by a committee set up by President Umaru Yar�Adua to reform Nigeria�s energy sector has warned that Nigeria�s oil production would decline by 30 percent by 2015.
�Indications are that even if current funding levels are maintained, total oil and gas production will decline by 30 percent from its current level by 2015,� the report prepared by the committee headed by the presidential adviser on energy said.
Unless the government boosts investment, such a decline would see Angola become Africa�s top oil producer and give western governments, who see West African oil and gas production as essential to global energy security, pause for thought.
Oil and gas operators have adduced several reasons for the rising profile of Angola within the oil producing community. What is seen as the �unprecedented oil discoveries� made in recent years by oil companies in Angola which have experienced a long period of operational stability is acknowledged as a crucial reason for the increasing production capacity of the southern African country.
Again, they see the contracting year cycles of oil and gas projects in Angola which is between three and four years as against Nigeria�s situation where a similar project may take between eight to10 years as a contributory factor.
This has made the Angolan operational environment more attractive hence the clear difference in the number of commercial developments which have resulted in the rise in daily oil production of Angola. Projects are quick to start off in early days in Angola given the country�s drive to boost revenues as shelf production was declining.
According to an oil company official, project lead times have increased in Angola due to a combination of limited operator base, service sector capacity and government plans. The government has a support plan for investment not only in the oil sector but in other sectors of the economy. Good investment on infrastructure and priority to industrialisation of the country combined to make Angola a destination for investors.
The Nigerian deepwater fiscal regime, it was noted, is more rigid or difficult to operate than that of Angola which has more room for flexibility, making the country�s terms more balanced than that of Nigeria, the official said.
Angola is also seen as being more responsive to the imperative for a faster project approval time than Nigeria.
There is the issue of the oil blocs in Angola being not too far from one another. This has made the operations of oil companies comparatively easier because there is the tendency for some of the companies operating in the country to share facilities.
On the contrary, Nigerian fields are far from one another. The various fields in which large recoveries have been made in Angola are Jasmim operated by Total; Xikomba A-bloc 15, operated by ExxonMobil; Kulto bloc 14, being operated by Chevron, and Girassol bloc 17, operated by Total. These are some of the fields currently on stream. The blocs being developed are Kizomba, Tombua landana, NE development bloc, bloc 18 West-bloc 31 and pazftor bloc 17. The bloc under plan are Kzomba sats Clov, SE development and bloc 32,
The joint venture operations in Nigeria have for many years been bedevilled by lack of funding. This situation has continuously affected the growth of the oil industry.
However, there are Nigerians who feel the situation in Angola may be counter-productive for the southern African country as the rate of exploitation of oil is higher than that of discovery. They say Nigeria has a larger oil reserve base of about 33 billion barrels when compared with the Angolan estimate of about 15 billion while the life span of the field is about 15 years.
�A matter of fact, I don�t see Angola posing any threat to Nigeria in terms of production level,� the managing director of an oil producing company told Business Day.
In his view, the only problem Nigeria has is that of the Niger Delta issue and as soon as that is resolved Nigeria will take its pride of place.
However, the success rate of deepwater activities after the discovery of the big fields like Bonga, Erha, Agbami, Abo, Akpo and Ulsan in Nigeria in the 1990s has slowed down.
They also point at Nigeria�s maturing fields which are said to be harbouring huge reserves which could still be exploited for the economic need of the country.