Nigeria’s oil production is likely to decline by 35% in the next 10 years, wood McKenzie, a consultancy, told Reuters on Thursday, as regulatory uncertainty and costs under the downturn in oil prices could prompt oil majors to postpone their final investment decisions on the three deepwater projects.
Nigeria is the largest oil producer in Africa. According to the monthly report released by OPEC this week, the daily output of Nigeria in January 2020 was 1.776 million barrels. Combined with the production of condensate, Nigeria’s total oil production exceeded 2 million barrels / day.
However, according to a study shared by wood Mackenzie with Reuters ahead of Friday’s publication, the start dates of three deepwater projects off the coast of Nigeria, operated by oil giants ExxonMobil, shell and total, are likely to be delayed by two to four years until the end of 2020.
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According to wood Mackenzie, the regulatory reform of Nigeria’s oil industry, as well as the oil bill, which is still to be finally approved after 20 years of delay and debate, has played a deterrent role in the investment decisions of oil giants.
In addition, the consulting firm pointed out that the three deep-water projects are not profitable in terms of current oil prices when the Brent crude oil price is lower than $60 / barrel, and the three projects may increase the output of Nigeria by 300000 barrels / day.
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