NNPC sees no immediate threat from US shale

The Nigerian National Petroleum Corporation (NNPC) sees no serious threat to its oil and gas industry from US shale discoveries.

Oil Minister, Madueke

"No doubt the shale gas phenomenon poses a pushback on our oil and gas, but… the impact is going to come a very long time from now," said NNPC group managing director Andrew Yakubu.
"A close examination of the various discoveries of shale gas shows a huge misalignment between what was projected and the actualisation of most of the gas projects that would bring shale gas into full maturity," Yakubu said.
Plans to expand Nigeria's LNG sector had been made uncertain by shale gas discoveries. Chevron and Shell in August this year exited from the planned Olokola LNG project, following on from UK-listed BG's departure from the scheme.
ConocoPhillips is selling its stake in the 10mn t/y Brass LNG project to Nigerian firm Oando. A planned expansion of the existing 22mn t/y Nigeria LNG plant on Bonny island with a seventh train has also been delayed because of uncertainty over project economics.
Nigeria's LNG plans have also been reviewed following large-scale gas finds in Mozambique and Tanzania that will be developed as LNG export projects. First LNG exports from Mozambique are scheduled from 2018.
Nigerian crude sales to the US have also been reduced in recent years because of a drop in demand for Nigeria's light sweet crude, with US shale oil output producing increased output of lighter grades.
Shell, Total, Italian firm Eni, Chevron and ConocoPhillips are also selling upstream oil blocks in Nigeria, mainly because of funding constraints at state-owned NNPC and insecurity in the Niger delta.  
"These are not withdrawals in the real sense of withdrawals. The fact is that a number of these international oil companies are moving into more challenging frontiers in the deep offshore and are leaving the onshore blocks which they consider less challenging," Yakubu said.    
"So it is only fair for them to release these blocks so that others, especially the indigenous operators can have the blocks and grow in the upstream business."
NNPC wants its own upstream arm NPDC to be able to produce 250,000 b/d by 2020 from around 90,000 b/d currently.