Nigeria’s deep-water oil fields, currently pumping about 600,000 barrels per day, remain “under- developed” and will only reach full potential in the right investment climate, Shell said.

Shell’s Bonga field, Nigeria’s first deep-water discovery in 1995, and similar fields “represent only a fraction of what could be produced”, Ian Craig, vice president for sub-Saharan Africa, said today at an industry conference in Abuja. “There is much more deep-water potential.”

International oil companies can play a major role in achieving Nigeria’s offshore oil production potential if the government provides the “business environment” for the multi- billion dollar investments required, Craig said, according to a Bloomberg report.

A new law to reform the way the oil industry is funded and regulated, which has been in the legislature for more than two years, is expected to be passed by the current government before its tenure runs out in May, President Goodluck Jonathan said on 2 February.

Energy companies say the proposed law will hand too much profit and control to the state and make new investments in deep-water oil fields unprofitable.

Exxon Mobil Corporation, Shell, Chevron Corporation, Total and Eni run joint ventures with state-owned Nigerian National Petroleum Corporation that pump about 90% of the country’s oil.

The petroleum industry bill will cap royalties at 12.5% and create “an overall government take of about 65%” in oil tax, Petroleum Minister Diezani Alison-Madueke said in a speech today at the Abuja conference.

Government is not “unmindful” that a lot of investment decisions are currently on hold due to proposed changes in deep-water fiscal terms, she said.

Oil exploration in Nigeria has slumped to the lowest in a decade after producers including Shell and Total backed away from investment until the country’s petroleum law is passed.

Just one exploration well was drilled in Nigeria in the past two years, the lowest since 1999, according to official figures released by the Petroleum Ministry. The number of wells peaked at 34 in 2002.