Nigeria's gas reserves could be underestimated
Nigeria's true gas reserves could be some 660 tcf compared to the current declared figure of 166 tcf, Presidential
Adviser on Petroleum and Energy, Dr Edmund Daukoru, has said.
Daukoru's disclosures, which he said further confirmed Nigeria as a gas province, came just as the Central Bank of Nigeria (CBN) announced that the country produced a total of 2.45 mm bpd of crude oil, including condensates and natural gas liquids, in August 2004, indicating an increase of 50,000 bpd compared to the 2.4 mm bpd output in July.
According to the Special Adviser, Nigeria's currently booked gas reserves of some 166 tcf, "represents only about 25
% of what many experts believe to be the true potential of some 660 tcf."
"This huge disparity between actual and expectation is in itself the result of many years of bias against gas, where presumed gas-prone prospects were actively and deliberately left untested," he said.
The need to reverse this trend, according to Daukoru, made the Federal Government tochart a new course which included
setting a national target to stop all flaring of associated gas by the year 2008, and also raising earnings from gas
exports to 50 % of oil revenues by 2010. To achieve these goals, the government has initiated individual projects
including the LNG, West Africa Pipeline Project and the Nigeria/Algeria Trans Sahara Gas Pipeline Project, Gas-fired
Power Generation, Natural Gas Liquids (NGL) and LPG extraction projects.
"In addition, various high-powered committees on Compressed Natural Gas (CNG), etc, under my ministry are seriously exploring various options to expand the use of gas, particularly in domestic urban transportation, power generation and industrial use," stated the adviser.
According to him, gas monetisation had been a slow and painful experience for Nigeria, stretching over many years of
"Whereas Algeria and Indonesia played a pioneering role in LNG development in the 1960's, Nigeria had no mass associated gas utilisation plan until the inception of Nigeria LNG in 1992/93. Indeed the neglect was so pervasive that even the supply to thermal power plants was through high pressure non-associated gas wells until recent years, while associated gas continued to be flared at a high rate which currently stands at nearly 1 bn cfpd, representing a loss of some $ 2.5 bn per year," he added.
Crude oil exports currently account for about 90 % of Nigeria's foreign exchange income. The CBN in its August
monthly report, said oil production was 2.45 mm bpd. The output is 14.4 % higher than Nigeria's official OPEC quota
of 2.142 mm bpd. In monetary terms, the Federal Government might have officially earned about $ 1.08 bn (at the
budgetary price of $ 25 per barrel), in the month of August 2004.
Oil prices are known to have risen well above the $ 25 per barrel price used in revenue projection for the 2004 budget so far this year with oil prices settling for $ 54.93 a barrel. The Federal Government hopes to save some N 609 bn on excess crude income this year, as a result of the upswing in prices.