Drilling deeper in the Delta

Report summary

After 60 years of development, the Niger Delta still holds an estimated 16 billion boe of yet-to-find potential. However, exploration has fallen out of favour. It's not just the fiscal uncertainty and the high costs. The favouring of indigenous companies rather than real explorers in awarding new acreage has also played a part. Most indigenous blocks awarded offshore since 2005 have seen no activity. Because of issues accessing good quality exploration acreage, investors have used improved technology to explore the deep potential of their development licences. Nigeria's deepwater fields have seen substantial reserves growth in the past decade. In the onshore, above-ground risks have encouraged producers to grow reserves from deeper horizons on mature fields. Although these are successful responses to the constraints faced by producers, longer-term production cannot be sustained without more acreage opportunities for real explorers supported by attractive fiscal terms.