PREVIEW-UPDATE 1-Stalled reforms in focus at Nigeria oil summit

Reuters

21 Feb 2011

PREVIEW-UPDATE 1-Stalled reforms in focus at Nigeria oil summit

* Higher oil prices, output boosts Nigeria's appeal

* Delayed reforms leave investment climate uncertain

* New projects stall, future production may suffer

ABUJA, Feb 21 (Reuters) - Uncertainty over reforms of Nigeria's oil and gas industry and the potential for unrest in the Niger Delta ahead of April elections will be among topics high on the agenda at an energy summit in Abuja this week.

The Nigeria Oil and Gas conference is West Africa's biggest annual energy gathering, offering all the major players operating in Nigeria the opportunity to speak with key government figures and strike deals with industry partners.

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With oil above $100 a barrel LCOc1 and crude production rising, Africa's largest energy industry should be a hugely attractive energy investment opportunity. But beneath the surface Nigeria's mainstay business faces major problems.

New investment has stalled and despite an increase in oil output over the last year, due mainly to a reduction in violence in the Niger Delta, Nigeria's production never came close to the government's four million barrel per day (bpd) goal for 2010.

"New projects have been on the decline," said Belema Osibodu, head of public affairs at Nigeria's Department of Petroleum Resources. "Maybe it is because oil companies are waiting to see what will happen with the PIB (Petroleum Industry Bill)."