Nigeria’s bid to raise its oil reserves to 40 billion barrels by 2020 remains firmly on track despite tough challenges of declining investment and security concerns, a government official said Tuesday.
“The Federal Government is very much committed to meeting the 40 billion barrel oil reserve target set for 2020,” George Osahon, head of the Department of Petroleum Resources, the country’s oil industry regulator, told reporters in Lagos. “It is in the best interests of the government to increase [oil] production and reserves.”
Nigeria’s oil reserves, including condensates, have remained at an average of 35 billion-37 billion barrels for the past five years.
Osahon acknowledged that reserves had been hurt by reduced exploration, crude oil theft and pipeline vandalism, and said reaching the 2020 target hinged on plans to develop new oil fields.
“It is for all of us as stakeholders [operators] to work together, minimize distractions and face the business of boosting reserves to 40 billion barrels,” he said.
Nigeria and its foreign oil partners — Shell, Total and ExxonMobil — have begun processes to develop four new deepwater fields forecast to add as much as 2 billion barrels of oil to the country’s reserves by 2020.
However, although the projects — Shell’s Bonga Northwest and Southwest/Aparo fields, Total’s Egina field and ExxonMobil’s Erha North Phase 2, have been confirmed, the companies have expressed concerns that the prolonged delay in the passage of a key landmark energy bill aimed at reforming the country’s oil and gas sector may affect progress.
The Petroleum Industry Bill has been stuck in parliament for over five years due to political wrangling.
Added to that, a sharp increase in illegal bunkering, crude theft and pipeline sabotage is proving a major hindrance to new investment.
The DPR announced in August that it planned to carry out a comprehensive review of oil licenses awarded to local and foreign companies in the 2005 and 2007 bidding rounds, with many of the acreages having seen little or no development since then.
–Staff, newsdesk@platts.com
–Edited by Jonathan Fox, jonathan.fox@platts.com
