MOBIL Producing Nigeria Unlimited, has warned that Nigeria's crude oil and gas production risks a decline of 40 percent in the next 10 years if urgent steps were not taken to maintain or increase the current level of production.
While unveiling its 2012 outlook for the energy industry, Exxonmobil disclosed that it would need about $11 billion investment to increase its production level in Nigeria, adding that since oil was discovered in Nigeria, the industry has not experienced a real growth.
Speaking to newsmen in Lagos yesterday, General Manager, Operational Technical Geoscience Department of Exxonmobli, Mr. Andrew Ejayeriese, said for Nigeria to sustain its leadership position in Africa, it must create the right condition and take quick decisions that enhance the overall production chain.
He said: "The current draft PIB proposes fiscal and non-fiscal recommendations that will not encourage investment in the industry, nor will it offset natural decline as fields mature.
"An operator needs to reinvest about 50 percent of annual cash flow to keep production flat.
"Without new investments, Nigeria's production will decline by 40 percent by 2020, while it could potentially grow by nearly 50 percent within same period, with continued and planned investments of $110 billion.
"Without investments, the industry will not replace declining production, let alone grow.
"Clearly, a tragedy for a country blessed with such a significant hydrocarbon endowment. ExxonMobil is supportive of the restructuring objectives and as part of OPTS, is committed to providing industry's input to the evolution."
He said Nigeria had the potential to remain the leading hydrocarbon producer and exporter in Africa for the foreseeable future.
He added that it must put measures in place that allow investors to achieve a competitive return, to operate in the most effective and efficient manner possible, and have a stable, fair investment environment.