Nigeria's Oil Industry Stalls over an Energy Bill

If the Nigerian oil industry is going to reverse the decline caused in part by regulatory uncertainty over the fate of the Petroleum Industry Bill, it will need additional investment in its deep-water oil fields. It made some progress June 21, when French energy firm Total and China National Offshore Oil Corp. announced that they had received approval from the Nigerian National Petroleum Corp. to award construction contracts on the delayed Egina deep-water oil project. Production is expected to begin by the end of 2017, and could reach 200,000 barrels per day.

Failure to pass the controversial bill, which would replace all of Nigeria's existing oil and natural gas laws, could cause the country's oil production to fall 20-40 percent by 2020, a problematic issue since oil represents about three-fourths of the country's exports. However, the bill's passage would cause problems of its own because certain provisions could make some offshore projects uneconomical. The bill is unlikely to pass anytime soon, and is even less likely to pass in its current form.