From the very beginning of oil exploration in Nigeria in 1937, till early 1993, practically all exploration and production undertakings were limited to land and swamps, in depths not greater than 200m.
But then in 1993, the Federal Government unlocked a new frontline in Oil and Gas exploration, signalling the optimistic prospects of a hopeful future, by assigning some offshore blocks in water depths reaching 2500m. Such water depths and plans for even greater depths than 2500m will undoubtedly positively influence the country’s production and reserve blueprint. Though these deep water procedures are technically challenging and massively capital intensive, experience multinational corporations have been bestowed some deep offshore blocks and even ultra deep concessions. By the end of 1998, the deep water operators in Nigeria had achieved the following:
- Acquisition of21,000 km 2D Seismic Lines;
- Acquisition of21,500 km 3D Seismic Lines;
- Drillingof33 exploration/appraisal wells at depths ranging from 300-1460m.
Adding to this greatness reflects significant findings reported by most of the operators. Little wonder then, that against a commitment of $864 million USD for the first 6 (six) years of deep water prospecting under a PSC (production sharing contract) the industry has invested approximately $1.3 billion USD up to the end of 1998. Operators have, certainly, sustained aggressive exploration undertakings nearly in spite of the unstable global petroleum atmosphere of current times, and long lead times from discovery, production and sales.
The technical challenges of deep and ultra-deep water depths has meant a number of less than 20 wells drilled wide-reaching in water depths greater than 1000m. Expectedly, since most of the deep water activity in Nigeria is in virgin territory, thereby lacking infrastructural support and services, the cost of searching is tremendously high. This is however perfected and set off against the PSC with the Federal Government of Nigeria under the aegis of the NNPC.