Diverse feelings linger in the oil and gas industry

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4 April 2011

Diverse feelings linger in the oil and gas industry

Afren optimistic about Nigeria’s 2011 oil production

Despite rising concerns over the unrest in the Niger Delta region, Afren Oil, an independent oil and gas exploration and production company has expressed optimism in its oil production activities in Nigeria.

The company expressed this optimism in a statement while releasing its 2010 full year results last week. 

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The PIB plague

However, not all oil companies with operations in Nigeria are this optimistic. In fact, some of them have been embarking on some divestures since last year. Experts believe that the potential Petroleum Industry Bill (PIB) and the already passed Local Content Bill might have had some impact on the selling decisions of some oil companies especially the fact that the early version of the PIB was proposing that the majors may be required to relinquish some of the undeveloped fields. Some of them are still expecting what will be when the Petroleum Industry Bill will be passed into law. A source at Shell said the company had series of projects which have been on hold for as long as 12 to 18 months and more, ever since the issue of the PIB and its attendant delay came up. According to him, oil companies need to be sure of the terms and conditions of the bill and what to expect before they can begin to make some decisions and continue to invest in further projects in the country. The Petroleum Industry Bill remains stuck. The legislation process has been held up for years, going from revision to revision and committee to committee as the industry’s decision-makers and government officials negotiate over its terms. Industry watchers say billions of dollars of potential investment, especially from foreign oil companies, in the oil and gas industry are on hold as a result of the uncertainty over the proposed legislation.