Nigeria’s oil reserves climb to 34 bn barrels

Dec 10, 2003 01:00 AM

The Federal Government announced that Nigeria's crude oil reserves have climbed to 34 bn barrels. This represents an increase of 3 % over the 33 bn barrels level attained at the beginning of this year.
The country's current production capacity has also been put at 2.5 mm bpd. Based on the rising reserve level and producibility, the Federal Government said it was ready for negotiations for a higher production quota from OPEC.

The Director, Department of Petroleum Resources (DPR), Mr Macaulay Ofurshie, who made an address on the activities in the downstream and upstream sectors of the petroleum industry, said the industry witnessed an aggressive exploration campaign throughout this year. A total of 42,185 sq km of 3-D seismic data was acquired by three companies alone, while a total of 62 wells were drilled in the fourth quarter of 2003, he said.
"With regards to increase in reserves and producibility, I am happy to inform you that our reserves position during the fourth quarter of 2003 stood at 34 bn barrels and our producibility is about 2.5 mm bpd," said the DPR chief. However, due to OPEC quota restrictions, the country was producing less than its technical capacity, he added.

The DPR had put Nigeria's oil production at 2.2 mm bpd. Nigeria's current OPEC quota is 2.018 mm bpd. Ofurshie said the industry was still marching on to achieve the Federal Government's aspiration of: increase in reserve base and producibility from the current 34 bn barrels to 40 bn and 2.5 mm bpd to 4.0 mm bpd opening up other frontier basins in the deep and ultra-deep offshore of the Niger Delta ensuring zero gas flare by 2008 encourage private participation in distribution phase of domestic gas industry encourage indigenous participation in the upstream mechanism of the industry and thereby increase local content.
He also confirmed that the Federal Government planned to reclaim dormant oil blocs from licence holders. "Non-performing operators blocs were advised to explain reasons for non-performance. This process is currently on and if explanations are unacceptable, the operator stands the risk of losing the licenses or leases," he said.

Ofurshie said the industry achieved 60 % level of gas utilisation. A total of 122 fields were penalised under the associated Gas Re-Injection (amendment) Decree of 1985 in the last quarter of 2003, while 70 fields were exempted from penalty. Ofurhie also explained that the Federal Government decided to intervene in the pricing of petroleum products because the deregulation policy was still at its teething stage.
"It is too early to allow prices to go just like that, otherwise everything will go hay-wire. With what is happening to the naira, marketers will justify any new prices they imposed. So what we are doing now is to mid-wife the deregulation and not restriction until both sides achieve balance," he said.

The DPR chief said the department, the nation's oil industry monitors, was more than prepared to effectively and efficiently supervise the oil and gas industry, especially in the era of deregulation and reforms. Meanwhile, the Special Adviser to the president on Energy and Petroleum, Dr Edmund Daukoru, said Nigeria was now set to discuss higher production quota within OPEC.
"We are seeking an increase of quotas. It is to be discussed. It depends on the global situation and the state of demand," Daukoru said. "Nigeria has said they (OPEC) have to look at the economic factor (situation of each country) and its production capacity," he said.

Daukoro, however, ruled out the possibility of Nigeria pulling out of OPEC in the event of not getting the desired quota.
"The press has talked about it but officially we have never considered leaving OPEC. OPEC is a balancing group, everybody has to balance the situation," he added.

Source: Thisday
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