Depletion of Nigeria’s reserves amid unexploited, undiscovered crude oil resources

Jul 31, 2013 12:00 AM

Nigeria's oil and gas industry operates hundreds of producing wells, gas plants, network of thousands of kilometres of pipelines criss-crossing the entire oil bearing zone to the flow stations and terminals.

Activities in the country’s oil and gas industry are much concentrated in the Niger Delta. The area is Africa’s largest delta and the third world largest. It is one of the largest wetlands in the world, with about 2,370 square kilometres consisting of rivers, islands, creeks, swampy terrain and estuaries.

In the past few years, oil exploration activities in the Niger Delta have been on a slow pace resulting to decline in the country’s crude oil reserve.

Nigeria’s crude oil reserve decline has been attributed to the absence of huge investments in recent times.

According to the Department of Petroleum Resources (DPR), there have been no serious activities and investments in the nation’s oil and gas sector in the last five years.

The DPR believed that it would take the country between five and six years to recover from the decline.

Some experts are of the opinion that there are undiscovered crude oil reserves in some parts of the country, which the Federal Government should make effort at engaging explorationists in the search.

Recently, the Nigerian Association of Petroleum Explorationists (NAPE) called on the Federal Government to organise a licensing round for the country’s oil sand, which is in large quantity in some parts of the country.

The country is said to have over 40 billion barrels of unexploited oil sand, which Nigerian explorationists believed could assist in boosting the country’s crude oil reserves.

Also, Bida Basin of Niger State is said to have hydrocarbon deposits with higher oil content than those in the Niger Delta.

Secretary of the committee set up by the Niger State government to fast track exploration and exploitation of hydrocarbon in the state,  Yabagi Sani, announced this after the committee’s meeting in Minna recently.

He said there could be 30 per cent presence of oil and 70 per cent of gas deposit from the source rock in the basin, whereas the ratio is 25 per cent oil and 75 per cent gas in the Delta region.

He added that the geo-chemistry analysis of the Toxic Content (TOC) using sulphur analyser indicated that the deposit of hydrocarbon in the basin is above 0.5 per cent required value, indicating that the deposit is of high quality.

The committee while submitting its report to the state government last year confirmed the presence of oil and gas in the basin and that exploration test at Patti-Shaba-Kolo, code-named Talba-1 Well and in two other locations will be conducted to determine the commercial quantity of the crude oil deposits in the area.

The committee had engaged the services of two American companies, Midland Refinery and Petro Chemical Company and Midland Petro-gas Resources limited to serve as special purpose vehicles for upstream and downstream activities for oil and gas resources development drive.

Sani said, the source rock had been analysed after two shallow wells had been drilled in Agaie and Kudu in Niger state, noted that the committee would undertake Aero magnetic geological mapping to be able to trap the deposits.

He added that his committee is planning to partner with other states within the inland Hydrocarbon Basins in the north to speed up explorations in such basins.

He said: “The committee has decided to liaise with the similar efforts in Sokoto, Borno, Bauchi and Benue basins to form inland hydrocarbon basins exploration association in the North.”

Sani said any effort capable of encouraging the Federal Government must be made because it is the only tier of government that has control over mineral resources. The committee would engage the Federal Government and also organise an international workshop to ensure that investors are encouraged to invest in the exploration process.”

The Vice President of NAPE, Lere Olopade, said that the Federal Government should organise oil licensing round to invite investors to the unconventional natural resources.

Olopade stated: “We should put on our thinking cap as a country and begin to look beyond now. We are just using the crude oil that we discovered long time ago without an aggressive effort to continue to add to the country’s crude oil reserves. We should embark on strategic plan to reposition ourselves before other African countries take over our position in the area of crude and gas production in the region. We should look at the unconventional crude oil potentials in the country.

“If we can exploit this huge tar sand discovery, it would assist in reducing the country’s unemployment level. I think our leaders should begin to look beyond the Niger Delta areas and begin to explore other regions in the country.

“Though it may require huge investment, but we need to start somewhere and we need to it to the bid round level. Government should try and invite investors to take part in the bidding process. Even if we do not have the technology in the country, I believe that there will be investors from other countries who will be interested in bringing their technological know-how to explore the potential in the country. Canada is making so much money from oil sand and Nigeria should begin to plan on how to capitalise on this natural resources to boost the country crude oil reserves”.

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