Contrary to the Federal Government’s target of increasing crude oil reserves, the country recorded a decline of 961.47 million barrels in four years on the back of low investment in exploration by oil companies.
The oil reserves fell from a high of 32.23 billion barrels in 2012 to 31.27 billion barrels in 2016 while the condensate reserves stood at 5.47 billion barrels from 4.91 billion barrels in 2012, the latest data obtained from the Department of Petroleum Resources by our correspondent showed.
The Federal Government in 2010 set the target of 40 billion barrels of crude oil reserves and a production of four million bpd by 2020 but exploration activity has slowed in recent years.
Industry stakeholders have continued to raise concerns as the regulatory uncertainty in the industry has resulted in fewer investments in new oil and natural gas projects, and the lack of licensing round since 2007.
The Director, Department of Petroleum Resources, Mr. Mordecai Ladan, said in the latest Nigeria Oil and Gas Industry Annual Report that the Nigerian petroleum sector had been affected by the disruption occasioned by the 2014 price crash.
He said, “This is due mainly to the mistaken assumption that the pre-2014 bullish market could hold much longer as the world seemed to be in the threshold of post peak-oil era. Novel technology, especially on extraction of shale oil opened the fresh vistas for unconventional oil with significant destabilising effects on conventional producers like Nigeria.
“The new oil from unconventional frontiers and the rising profile of green energy are posing considerable challenges and opportunities for Nigeria. More noticeably, increased access to unconventional oil reserves in the shale sector and the lifting of the self-imposed US oil export embargo have significantly shrunk demands for Nigerian oil in the United States, a former prime destination for Bonny Light and other Nigerian crude blends.”
Ladan noted that the US had since changed from being a major market to being a major competitor for markets across the globe, adding, “Nigeria like other conventional oil producers around the world is also grappling with the growing competition for market space from the renewable energy sector.”
He, however, said those market challenges also had ingrained in them new vistas of opportunities on oil and gas activities in Nigeria.
“Particularly, the unfolding realities are dictating the need for more institutional and operational efficiency to effectively compete in the shrinking market place and for new investment opportunities to explore and develop new prospects.”
The DPR director said the speedy enactment of the petroleum industry governance law, which was recently passed by the National Assembly, and the pending bills, would place the Nigerian oil and gas sector on better pedestal to compete in the increasingly complex global energy terrain.
The Group Managing Director, Nigerian National Petroleum Corporation, Dr. Maikanti Baru, said last week that the passage of the Petroleum Industry Bill would unlock $10bn worth of oil and gas investment in the country.
The first part of the bill, Petroleum Industry Governance Bill, has been passed by the Senate and the House of Representatives, awaiting the President’s assent.
“When the other sections of the bill are finally passed, it will unlock over $10bn of investment held up due to uncertainty,” the NNPC GMD said.