Nigeria’s oil reserves drop to 36bn barrels

17 August 2011, Sweetcrude, Lagos – Nigeria is finding it difficult growing its oil and gas reserves. Against the 37 billion oil reserve, inclusive of condensate, contained in the 2010 Department of
Petroleum Resource (DPR) report, the Federal Government said yesterday that the nation’s oil reserve had dropped to 36.6 billion barrels.

Also, the country has not fared well in its efforts to curb the waste of its gas stock as it still flares 1.4 billion cubic feet of the resource daily from the current 6.8 billion cubic feet per day gas production.

The decline in oil reserve has heightened concerns that Nigeria’s oil wells might dry up in the next 50 years unless exploration is immediately shored up.

The Nigerian National Petroleum Corporation (NNPC) had earlier projected that the country’s oil reserve would hit 40 billion barrels by December this year, with increases in exploration activities, especially in the deep offshore.

At the first Nigerian Gas Association (NGA) Business Forum for 2011 in Lagos, the Permanent Secretary,
Ministry of Petroleum Resources, Mr. Goni Sheikh, said the 40 billion target could only be achieved through aggressive exploration programmes.

He said Nigeria’s crude oil production now stands at 2.6 million barrels per day (670,000 bpd from deep offshore). “This is a significant improvement from the production of 1.3 million bpd at 2008.”

He added that the improvement had been attributed to the restoration of System 2C (which supplies crude oil to Warri and Kaduna refineries) and the success of the government’s amnesty programme for repentant militants in the Niger Delta.

Sheikh puts the country’s current gas production at 6.8 billion cubic feet (bcf) per day, 1.4 bcf of which is flared per day.

He said the total crude oil reserve at the beginning 2011 stood at 31.218 billion barrels 5.314 billion barrels from condensate and 182.816 trillion cubic feet of gas.

“In the bid to achieve government’s policy thrust in this sector, the aspiration of growing reserves to the 40 billion barrels mark and increasing production to four million barrels daily, there is the need for aggressive exploration programme,” he said.

The official said Nigeria’s proven gas reserve, which is the seventh largest in the world, is put at 182 trillion cubic feet).

Sheik explained that the gas reserve is just 32 per cent of the country’s potential. “All crude oil reservoirs naturally contain gas but not all gas reservoirs contain oil,” he said.

Despite the potential, he said that the Nigerian gas sector is relatively undeveloped, with low levels of domestic utilization and attributed gas flaring in Nigeria to lack of infrastructure to transport it from the oil- producing region to consumers.

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