Nigeria's Crude Oil Reserves Suffer Serious Setback

The nation’s crude oil reserves dropped by 481 million barrels to 36.972 billion barrels in 2018, according to a new report by the Organisation of Petroleum Exporting Countries.

OPEC, in its 2019 Annual Statistical Bulletin, said Nigeria’s crude oil reserves stood at 37.453 billion barrels in 2017 and 2016; 37.062 billion barrels in 2015 and 37.448 billion barrels in 2014.

According to the report, the number of active oil rigs in the country rose to 32 last year from 13 in 2017 and nine in 2016.

Following the steep fall in global oil prices in 2014, the nation’s rig count dropped from 46 to 29, the OPEC data showed.

Rig count is largely a reflection of the level of exploration, development and production activities occurring in the oil and gas sector.

The slump in oil prices, which started in mid-June 2014, forced many companies operating in the Nigerian oil industry to slash their capital budgets and suspend some projects, resulting in a drop in the number of rigs.

The upturn in the rig count in 2018 was mostly triggered by the rally in global crude oil prices and the suspension of militant attacks on oil facilities in the Niger Delta.

The number of wells completed in the nation’s oil industry, which dropped from 141 in 2014 to 116 in 2015, increased to 81 last year from 76 in 2017 and 2016, according to OPEC.

Nigeria has the second largest proven reserves in Africa, with an estimated 37.5 billion barrels of crude oil deposits at the end of 2017, representing 2.2 per cent of the global total, according to the BP Statistical Review of World Energy 2018.

The Director, Emerald Energy Institute, University of Port Harcourt, Prof. Wumi Iledare, told a Punch correspondent that most oil companies in the country “are mostly developing what they have.”

“They are not looking for new reserves; you can’t sustain the oil and gas industry unless you are investing in new reserves,” he added.

Decrying what he called “unnecessary uncertainty” occasioned by the delay in the passage of the Petroleum Industry Bill, Iledare said, “Investors will be wary and the competition is keen. Twenty years ago, only five countries were producing oil in Africa. Today, nearly every African country along the coast has oil; so there are other places investors can go to.”