CAPITAL: ABUJA
MONETARY UNIT: NAIRA
REFINING CAPACITY: 438,750 B/CD
OIL PRODUCTION: 1.9 BILLION B/D
OIL RESERVES: 22.5 BILLION BBL
GAS RESERVES: 124 TCF

Nigeria's government declared a national security emergency in July 2000 and took action to combat violent crime.

The oil sector provided more than 80% of government revenue.

Crude oil and product thefts and smuggling were rampant, and botched schemes and vandalism resulted in many deaths and disrupted production and exports. A pipeline blast near Warri in July 2000 resulted in 250 deaths.

Nigeria ordered a satellite monitoring system from the US to monitor facilities. Nigerian National Petroleum Corp. estimated that it lost $18.8 million in the first 5 months of 2000 from vandalism of fuel pipelines.

Olusegun Obasanjo, who became president in mid-1999, pressed economic reforms including privatization and phaseout of subsidies.

Most of the country's oil reserves are in about 250 fields of less than 50 million bbl each along the Niger River Delta. A further 200 fields are known to exist.

NNPC improved the rate of payment of its share of capital spending in joint ventures.

Upstream developments

Foreign operators participating in Nigerian joint ventures included Shell Petroleum Development Co. of Nigeria Ltd., ExxonMobil Nigeria Producing Unltd., Chevron Nigeria Ltd., Nigeria Agip Oil Co., TotalFina SA unit Elf Petroleum Nigeria Ltd., Texaco Overseas Petroleum Co. Nigeria Unltd., and PanOcean Inc.

NNPC controlled 55-60% equity in these joint ventures on behalf of the Nigerian government.

The country's production was set to increase from deepwater finds. They included TotalFinaElf's Akpo field, Shell's Bonga field, ExxonMobil's Erha field, and Texaco's Agbami field.

Smaller but important finds could boost output. These included Agip's Abo field, Shell's Doro and Ngolo fields, Statoil's Nnwa field, and TotalFinaElf's Ukot and Chota fields.

Agip was to be producing 450,000 b/d by 2004, up from 200,000 b/d in 2000 and 150,000 b/d in 1999. The new level would make Agip the country's third largest oil producer.

Agip started up Biseni and Nibe fields, reopened the Idu flow station, and hiked production at Beniboye and Kwale fields.

Agip also launched a plan to comply with the government's program to eliminate gas flaring and began an independent power project.

Erha field, on OPL 209, could produce 250,000 b/d by 2003-04 from reserves of 1.2 billion bbl.

Still more discoveries were reported in 2000. Shell discovered Soku oil and gas field onshore at midyear with 70-100 million bbl recoverable. Production was to have begun in late 2000. TotalFinaElf discovered light oil on Block 246.

Oil companies snapped up 14 blocks in a licensing round during the year.

Conoco Energy Nigeria Ltd. began talks to participate in development of Nigerian Petroleum Development Co.'s two oil fields on OPL 91 in the Niger Delta.

Conoco in 2000 produced 22,280 b/d from its Ukpokiti marginal oil field on OPL 74. Found in 1992, it has 30 million bbl of reserves.

Conoco also expressed interest in contributing to government gas-gathering and utilization strategies.

Nigeria had gas reserves of 124 tcf, or 17 billion boe. About 65% of the associated gas was flared, while the rest was used to enhance crude recovery or in gas-related projects such as Nigeria's LNG plant.

A TotalFinaElf unit agreed to finance most of the $1 billion development costs for the offshore Amenam project, which included development of nearby Kpono field.

Amenam/Kpono was delayed several years by concern over how the NNPC would finance its share of the costs. Production was to begin mid-2003, reaching 125,000 b/d.

Famfa Oil Ltd., Texaco Inc., and Brazil's Braspetro said the Ikija-1 wildcat on deepwater OPL Block 216 about 70 miles off the central Niger Delta tested a separate structure 13 miles southwest of the companies' previously announced Agbami find. Ikija cut 240 ft of net oil and natural gas pay in multiple zones between 11,000 ft and 15,750 ft.

The well went to 17,565 ft in 6,066 ft of water. Well results were to be combined with geological and engineering studies to determine commercial potential.

Shell Petroleum Development let a $120 million well testing and completion services contract related to development of EA offshore oil field to Nigerian service company Ciscon. The field, 90 km south of Warri in shallow water, was expected to cost $1 billion to develop.

With 350 million bbl reserves, it would produce 170,000 b/d of oil and 1 bcfd of gas when fully developed.

Ciscon was to provide services and equipment for the 54 EA wells, with the first to have been spudded in April 2001.

ENI planned $1 billion in upstream spending in 2001-03 to reach a production target of 360,000 b/d in Nigeria, where it produced about 240,000 b/d in mid-2000.

Shell Capital Ltd. and Baker Hughes EHO Ltd. signed an innovative $19.1 million loan facility with Amni International Petroleum Development Co. of Nigeria to redevelop and increase production from Ima field in shallow water.

The funds were to be used to drill two further development wells and two sidetrack wells alongside wells that had suffered bore damage. The project could increase field production by 6,000-8,000 b/d of condensate—double early-2000 production.

Ima field was discovered in 1994 and came on line in 1996. It is in 30 ft of water 3 km off Bonny Terminal. Ten wells produced 11 million bbl. Reserves were put at 15-30 million bbl.

Processing activity

Severe fuel shortages prompted Nigeria to award a $214 million contract to Total Nigeria in 1998 to revamp the Kaduna refinery.

Total in late 2000 said the Kaduna maintenance would not be completed until September 2001.

NNPC awarded a $7.6 million contract to ENI unit Comerint Nigeria to repair a damaged boiler at the 125,000 b/d Warri refinery. The repair work was to be completed just ahead of a Warri turnaround set for first quarter of 2001.

Product imports were to continue even after the four Nigerian refineries had undergone maintenance turnarounds and were running at capacity, NNPC said.

NNPC found it to be cheaper to import products directly than to ship Nigerian crude abroad for processing and import the products.