There are strong indications that leading indigenous oil companies may be ready to play vital roles in Federal Government’s aspiration to achieve its target of 2.5million barrels per day (mb/d) by the year 2020.
According to the Economic Recovery and Growth Plan (ERGP) of the Federal Government, the nation plans to reach 2.2 million barrels per day (mb/d) output while also targeting 2.5mb/d by the year 2020.
Currently, the country is producing an average of 1.8mb/p due to shut down of some oil installations like Bonga (maintenance), Forcadoes pipeline (militancy attack) and others.
However, from all indications, one of leading indigenous exploration and production companies, Aiteo Eastern Exploration and Production (Aiteo E&P), a member of Aiteo Group, is set to consolidate its
position and play a major role in achieving the target of 2.5mb/d by the federal government.
Prior to the signing of Nigerian Content Act in 2010, most indigenous players were operating in service providers in the upstream space of the oil and gas sector. However, today, indigenous companies like
Aiteo, Seplat, Oando and Newcross are dominant players in the upstream sector.
Infact, Aiteo, Eroton and Newcross collectively produced up to 200,000bpd in the fourth quarter of 2016. The trio took over assets worth $4.1billion from Shell, Total and Eni between 2004 and 2005. A
figure of that size used to be attributed to the oil majors in the past. But that may not be the case for much longer, considering that the smaller players have been making strides to finance and increase
the size of their portfolios.
This is a revolutionary development considering that before now, the industry had been dominated by International Oil Companies (IOCs) listed by Forbes in 2016 as some of the biggest oil companies in the
However, industry stakeholders opined that Aiteo is tipped to be one of the major players in the industry going by its antecedents. The company discovers, produces, stores and delivers energy resources to
marketplaces worldwide, and is currently working on developing energy resources in some of the world’s most significant basins.
According to a financial analyst, Patrick Atuanya, “I am optimistic about the prospects of indigenous players, particularly their tenacity in the face of challenging macro-economic headwinds. Aiteo is among the other indigenous players that will play a major role in helping the government to achieve its goal of 2.5mb/d by the year 2020; considering that the company just began full operations in May 2015.
“Within that timeframe, it won the bid for the 45 per cent total interest in OML 18, previously held by oil majors Shell Petroleum Development Company, Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited.
“It’s a remarkable feat for any indigenous Nigerian firm to be growing oil production amid the downturn in oil prices. Most majors have cut capital expenditure (capex) and written down the value of or sold assets for those heavily indebted.
“With indigenous firms accounting for approximately 12 per cent of Nigeria’s 1.8million bpd total oil production, it means Aiteo Group is responsible for some 42 per cent of total indigenous production.”
An Energy Analyst, James Udeme, stated that “indigenous operators were able to play dominant role in upstream sector because they have been able to poach top talent from IOCs and are excellently run. This has contributed positively towards increasing the percentage of Nigerian production coming from local operators.”
The company’s main subsidiary, Aiteo Eastern Exploration and Production, operates on the resource-rich OML 29, which Aiteo acquired from Shell Petroleum Development Company in September 2015. At that
time, production was around 23,000bpd. By October 2016, figures from the NNPC showed that production had risen by 300 per cent to 90,000bpd. Aiteo Eastern E &P also operates the 97km Nembe Creek Trunk Line, an evacuation pipeline that covers Nigeria’s eastern Delta region. It is Nigeria’s major onshore pipeline, with a capacity of 600,000bpd.