Nigeria’s oil reserves to last for about 33 years

May 16, 2005 02:00 AM

The Department of Petroleum Resources (DPR) has stated that Nigeria's crude oil reserves is expected to last for about 32.97 years.
The Ministry of Petroleum Resources has also extended the closing date for submission of bids for the 2005 Licensing Round for oil blocks to June 17 this year.

According to the latest monthly report of activities of the nation's Petroleum Sector by the DPR, the oil reserves depletion rate as at last January, was 3.03 % based on an estimated annual oil production of 1,037.90 mm barrels.
"The remaining oil reserves as at January 31, 2005 indicated a life index of about 32.97 years," said the DPR. This latest DPR figure indicated that the expected life span of the nation's crude reserves had slumped from the 34 years period calculated in 2003, by which time annual depletion rate was based on production of 721.6 mm barrels.

Oil industry experts have earlier warned that Nigeria was consuming its oil reserves faster than the rate of addition, as the nation sought to maximise the current high oil prices. For instance, Nigeria granted multinational producers a technical allowable quota of 2.85 mm bpd for the first two months of this year, compared to the country's OPEC quota of 2.24 mm bpd.
Nigeria, Africa's biggest crude oil producer and sixth in OPEC, has 35.254 bn barrels of oil reserves, according to DPR figures. The reserves had jumped from 22 bn barrels in 1993 to 30 bn barrels by the end of 2001. This has extended the life span for the exploitation of the resources earlier put at 25 years by 1997.

The Federal Government, which has set a target of raising the country's oil reserves to 40 bn barrels by 2010, has also called on oil firms to increase their rate of oil exploration. According to the DPR, 34 exploratory wells have been drilled in the deep, offshore zone so far with over seven huge oil/gas world class discoveries in Bonga, Bonga SW, Agbami/Ekoli, Erha, Akpo, Chota and Nnwa/Doro.
Over 3 bn barrels of crude oil and nearly 16.2 tcf of gas have been discovered since the first deep offshore well was spudded in 1995. Meanwhile, the Ministry of Petroleum Resources has extended the closing date for submission of bids in the 2005 bid round to June 17. The earlier date was April 27, 2005.

Senior ministry officials said the shift was due to the fact that the process was kicked off one month behind schedule and also to allow more companies participate.
"The bids are scheduled to be opened by end of July 2005, while awards will be made by end of August," said an official. A total of 63 oil blocks have been put on offer. The Federal Government planned to use the licensing round to shore up investment in the nation's downstream oil sector and power sector.

Blocks awarded in the 2005 licensing round, are also expected to deliver substantial discoveries towards meeting government's target of 40 bn barrels of oil reserves and 4.5 mm bpd production capacity by 2010.
Ministry officials said a model Production Sharing Contract (PSC) applicable to the licensing round had been formulated in the interest of both government and the bidders.

Source: This Day
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