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Petroleum Policy

Posted by on 12/23/2003 4:02:19 PM | Views: 264 |

Petroleum Policy

The Federal Government's Policy goals for the upstream petroleum sector include:

-Increased Crude oil output from the current average level of 2.2 million bpd capacity to a production level of 3 millionbpd by the year 2001;

-Increased associated gas utilisation to end flarering by the year 2010;

-Encouraging greater foreign investment to finance exploration through produc tion sharing contracts with foreign operators rather than the traditional joint venture agreements;

-Deregulation of petroleum products pricing;

-Restoration of peaceful and cordial relations with Niger Delta oil-producing communties.

A major policy was introduced in 1996 under the Marginal Fields Decree, which allows the big oil companies to farm-out their (less than 10,000 bpd production) to indigenous oil companies, thereby stimulating local particpation.

The Obasanjo Administration has announced that it will not continue the practice of discretionary allocation of oil blocks. Allocations will be made based on competitive international bidding in con increased associated gas utilisation to formity with industry practice internationally.


In terms of proven reserves of crude oil and gas, Nigeria has entered the mature phase of petroleum exploration and production, especially in the onshore Niger Delta Conservation policy strategies the manufacturing sector would prevent rapid depletion of the nation's petroleum resources.But accelerated development and depletion of offshore oil filds caused by disruptions of onshore oil production by community and environmental opposition are real threat to industry. Greater participation by coounity stake-holders in the management of Nigeria's petroleum resources will save the indutry from early collapse.