Nigeria’s energy sector was expected to gain momentum from 2022 following the passage of the Petroleum Industry Act (PIA) and a slight recovery from a COVID-19 induced recession, rather it saw one of its busiest years. recorded volatiles.
In 2022, the Nigerian government began commercial crude oil production in the north, completed bidding rounds for marginal oil fields, and began implementation of the PIA, renaming the national oil company and creating regulatory bodies for the oil exploration and production sectors. Petroleum.
It was also the year that crude oil theft reached the level of holdups, forcing Big Oil to step up divestment plans, and Russia’s war against Ukraine hit global oil markets.
Messy downstream sector and fuel shortage
The year began with the revelation that the Nigerian National Petroleum Company (NNPC) and its partners imported adulterated gasoline, destroying private cars and causing some shortages of the products, especially in Lagos and Abuja. The situation went downhill from there.
The shortage of foreign currency reduced NNPC’s ability to import, even as it spends millions of dollars a day paying subsidies. The shortage worsened again towards the end of the year, and Nigerians spent the holidays worrying about the fuel in their tanks.
Oil exploration in the north
President Muhammadu Buhari in November inaugurated the Kolmani Integrated Development Project in the northeast. It is designed as a fully integrated on-site development project comprising upstream production, oil refining, power generation and fertilizers. According to the NNPC, there are more than 1 billion barrels of oil reserves and 500 billion cubic feet of gas in the Kolmani area and huge potential for more deposits as exploration efforts intensify.
Oil theft and pipeline vandalism
Oil prices rose as high as $130 a barrel on the world market in the wake of Russia’s invasion of Ukraine in February, but rampant theft of crude forced many producers in Nigeria to close their fields, ensuring the country does not benefit.
In October, NNPC uncovered a four-kilometre illegal pipeline from Forcados in Delta state to the sea and a cargo port that was part of an elaborate oil theft operation for the past nine years.
The country lost its status as the largest oil producer for six months and has been unable to meet its OPEC quota since November 2021.
This forced the government to hire private security companies to secure the pipelines, including one associated with a previously wanted militant, the Ekpemupolo government, popularly known as Tompolo. The NNPC also said it was building a surveillance architecture similar to that of Saudi Aramco to monitor the pipelines.
Divestments from Big Oil
Multinational oil companies intensified their plans to divest from the Niger Delta due to increased theft of crude oil and pressure from their shareholders to seek cleaner energy sources. ExxonMobil, Chevron and Shell advanced their divestment plans, even when they met with resistance from the NNPC and the Nigerian government.
NNPC blocked the sale of shares of ExxonMobil’s Nigerian unit to Seplat Petroleum Development Company. A court case in Port Harcourt blocked Shell’s divestment plans.
In July, Panoro Energy, a London-based, Oslo-listed oil and gas company, announced the sale of its wholly owned subsidiaries, Pan Petroleum Services Holding BV and Pan-Petroleum Nigeria Holding BV, to PetroNor E&P ASA.
Ikike oil field production
TotalEnergies, which operates Oil Mining License 99 in association with NNPC, started production at the Ikike field in Nigeria in July.
The company, which owns 40 percent of the oil field located 20 kilometers offshore at a depth of about 20 meters, said the Ikike platform is connected to Amenam’s existing offshore facilities via a 14 km multiphase pipeline. . According to TotalEnergies, it will deliver a maximum production of 50,000 barrels of oil equivalent per day by the end of 2022.
The Nigerian government completed marginal oil fields and in December announced it would offer seven deep offshore oil blocks to investors in its 2022 mini-bidding round with the aim of spurring new exploration and drilling activity in the country’s prospective deepwaters.
The regulator said the oil blocks under the bidding exercise will cover an area of about 6,700 square kilometers in water depths of 1,150 to 3,100 meters.
Agreement signed for Nigeria’s first floating liquefied natural gas project
UTM Offshore has signed an agreement with the UK’s Kellogg Brown and Root, Japan Gas Corporation and Technip Energies for the initial engineering design for Nigeria’s first floating liquefied natural gas (FLNG) project.
The FLNG facility of 1.52 million tons per year, with the capacity to process 176 million standard cubic feet of natural gas per day and condensate, will have a storage capacity of 200,000 cubic meters and will be located 60 km from the state coast of Akwa Ibom, Nigeria, was conceived to serve the global energy market.