Nigerian Oil Exploration at 10-Year Low Before Petroleum Law

Bloomberg

17 Feb 2011

Nigerian Oil Exploration at 10-Year Low Before Petroleum Law 

Oil exploration in Nigeria has slumped to the lowest in a decade after producers including Royal Dutch Shell Plc and Total SA backed away from investment until the country’s petroleum law is passed.

Just one exploration well was drilled in Nigeria in the past two years, the lowest since 1999, according to official figures released by the Petroleum Ministry. The number of wells peaked at 34 in 2002.

“Funds have not been available” for exploration, said Belema Osibodu, a spokeswoman for the Department of Petroleum Resources, in a telephone interview yesterday.

Fewer wells meant the government missed its targets to boost reserves to 40 billion barrels and output to 4 million barrels a day by 2010. Nigeria’s total crude oil and condensate reserves of about 37 billion barrels are the second-largest in Africa after Libya. The country is the continent’s biggest producer, with current oil output of about 2.1 million barrels a day, according to the state oil company.