776c7d8a9fe47e7479fb440dc323bb19_screen_shot_2012_10_15_at_16-46-51ExxonMobil recently announced a significant discovery with a potential recoverable resource of between 500 million and one billion barrels of oil on the Owowo field offshore Nigeria.

At an average price of $50 per barrel, the new field is worth $50 billion in potential revenues for the Nigerian oil and gas industry over the next few years, with a potential to rise higher if the international prices of crude rise.

The potential revenue is almost twice of what the government is hoping to borrow from the international financers. This will be the first major find in the country for years.

Policy indecision and commitment to contract agreements have stalled investments in the nation’s petroleum industry, and in some cases, even pushed some companies out of the country.

Oil Find

The Owowo-3 well, which was spud on 23 September, encountered about 140 meters of oil-bearing sandstone reservoir.

Owowo-3 extends the resource discovered by the Owowo-2 well, which encountered about 157 meters of oil-bearing sandstone reservoir. The well was safely drilled to 3,173 meters in 576 meters of water.

“We are encouraged by the results and will work with our partners and the government on future development plans,” said Stephen Greenlee, President, ExxonMobil Exploration Company.

This discovery will no doubt have a positive impact on the country’s crippled production and export operations. But before this can happen, a number of stakeholders have called on government to make the operating environment more favourable get ExxonMobil and other joint venture partners to invest more in exploration and production.

The development is also an encouragement to ExxonMobil, which together with other oil exploration companies, Shell and Chevron, lost over $7.1 billion, about 70% of earnings, in the first half of 2016 to militancy, low oil prices, and weak refinery margins.