Oil and Gas Exploitation and Production in Nigeria. Recent Development and Challenges Ahead.

For many years to. come, the oil and gas industry in Nigeria will continue to play a mostimportant role in the economy of the country. The prospects for meeting up with an oil reserve base target of 50 billion barrels by the year 2010 as set in the country's Vision 2010 are quite good. The country's deep offshore from all indications will continue to be a beehive of activities for many years to come. However, a lot of the anticipated success will depend in real terms on our abi'lity to cope successfully with several factors and challenges that are of crucial importance in order for the country to fully harness the nation's oil and gas resources.for the economic well-being of the people. " The petroleum industry in Nigeria has in the last ten years entered a new era of growth. Better decision-making, business advantages, and significant gains in productivity now appear to depend on an individual company's ability to integrate the collective knowledge of its entire organization. Operating companies have no choice, but to continue to harness new technology to reduce cycle time and increase productivity. In the face of all the current uncertainties and weaknesses in the oil market, E & P companies (whether indigenous or foreign) who hope to survive and prosper in Nigeria in the years ahead, will have to review the terms of their competitive posture. The indispensable qualities required will include: O The ability to control costs. O Possessing or having access to the latest technologies. O The ability to confront and resolve environmental problems. O The ability to immediately recognize and interpret signals cornins from the oil market and implement the consequent programmes in real time. The enhancement of local content, the ability to deal will1 produced gas, harnessing it for maximum economic benefits instead of flaring it, and prompt payment of Joint Venture (JV) cash-calls whenever due are some of the key challenges that successive Nigerian governments have to contend with. Our country is presently rated very lowly in the global oil and gas industry in terms of political and business risk. Business/political risk is assessed in today's investment climate by considering such factors as environmental activism, ethno-linguistic factionalism, cash repatriation restrictions, and the threat of adverse contract changes. Nigeria's investment climate in the oil and gas sector is today considered as high-risk because of our stand on some of the factors listed above.