Nigeria plans to spend about 15 to 20 billion dollars annually on oil exploration and production, junior oil minister Odein Ajumogobia said Tuesday
“An estimated annual spending of about 15 to 20 billion dollars (10.2 to 13.6 billion euros) is anticipated in Nigeria’s exploration and production sector,” Ajumogobia told participants at a Gulf of Guinea Oil and Gas conference here.
The minister said this “aggressive production capacity expansion plan” will put Nigeria in the forefront of investments in the Gulf of Guinea. This region also comprises Angola, Cameroon, Gabon, Congo, Equatorial Guinea and Sao Tome and Principe. In all, it has estimated oil reserves of about 60 billion barrels.
Ajumogobia said Nigeria’s crude oil reserves currently stand at about 35 billion barrels, putting the west African country in good position to play a critical role in global crude oil supplies.
The minister said the state-run oil company, NNPC, was being restructured for better performance, adding that “this reform will address the challenge of funding that has threatened the sector growth”.
“As a prelude to this, the federal government has this year allowed NNPC to attempt to raise third-party finance for its activities and about six billion dollars is currently being sourced from these sources,” Ajumogobia said.
“This effort will enable the JVs (Joint Ventures) to sustain a higher level of activity estimated at about 15 billion dollars in total for 2008”, he added.
Joint-venture funding has been an issue between Nigeria and major oil companies, with the foreign companies accusing the west African country of defaulting in foreign currency cash call payments.
Nigeria is Africa’s biggest oil producer, accounting for a daily output of 2.1 million barrels.