NIGERIA - Govt. Moves, NPDC & The Locals.

The Department of Petroleum Resources (DPR) is the state's E&P regulator and supervisor of all the operations being carried out under oil and gas licences and leases. The operations include E&P and marketing of crude oil, refined petroleum products and natural gas. NNPC is vested with the exclusive responsibility for upstream and downstream development, which entails exploiting, refining, and marketing Nigeria's crude oil. Through the NAPIMS, NNPC supervises and manages state investment in the petroleum industry. Since its inception in the 1970s, NNPC and its subsidiaries have undergone constant restructuring. NNPC's oil and gas operations are undertaken in the upstream and downstream. NNPC upstream operations are managed by the E&P Directorate which consists of five Strategic Business Units (SBUs):

1. National Petroleum Investment Management Services (NAPIMS)
2. Crude Oil Sales Division (COSD)
3. Integrated Data Services Limited (IDLS)
4. Nigerian Petroleum Development Co. (NPDC)
5. Nigerian Gas Co. (NGC)

These SBUs are collectively responsible for surveys, seismic data collation and interpretation, crude oil exploration, production, transportation, storage and marketing.

Based in Abuja, the federal capital, the government has taken a set of measures to protect the E&P operators in the Niger Delta and other onshore areas. The US has provided the armed forces with gunboats to help counter oil thieves or sabotage.

Abuja has since 2005 had the accounts of all oil companies operating in Nigeria, including NNPC and NPDC, audited by Hart of the UK. Done under the auspices of the Nigeria Extractive Industries Transparency Initiative, part of a world push for openness, this is to authenticate the firms' claims about daily crude oil production (see Part 1 in omt5NigrProspJul30-07 - see chronology of the main petroleum events in gmt5NigrGeoJul30-07).

NPDC's crude oil production now is over 80,000 b/d, including about 50,000 b/d in a special JV with Agip from the Okono field under a PSC. NPDC and its partners aim to raise production to 150,000 b/d by 2008. It is to improve its technical capacity through partnerships with foreign firms which operate PSCs.

NPDC intends to operate in other African countries and elsewhere. In its expansions, NPDC is to follow the models of Statoil and Petrobras. NPDC is developing six offshore oilfields off Nigeria with multinational oil companies. NPDC's partners in these include Shell, Agip, Chevron, Total and some private Nigerian firms. In July 2004 NPDC launched a programme aimed at raising its operations to the level of world-class NOCs. Its objective is to make NPDC a "viable oil producing company that can acquire and develop blocks anywhere in the world", says its top management. NPDC is bidding for oil blocks in other African countries.

Indigenous oil producers include Conoil and Moni Polo. Together with NPDC, PSC-based ventures and Addax Petroleum, a Geneva-based firm, this group's outputs will rise to about 270,000 b/d in the coming years (see background in omt6NigrFieldsAug8-05).