The Nigerian Upstream Petroleum Regulatory Authority says the country’s oil reserves declined by 50 billion barrels over 14 years.
According to the NUPRC, oil reserves shrank from 38 billion barrels to 37.50 billion barrels between 2008 and 2023.
In a publication, the NUPRC blamed this on the tremendous decline of exploration activities due to a lack of investment by exploration and production companies.
The NUPRC maintained that oil companies’ lack of investment could be attributed to the delay in passing the Petroleum Industry Bill, among other factors, like the COVID-19 pandemic.
This, it was learned, also led to job losses by geophysical and geological servicing companies.
“It has been observed that in the last 10 years, exploration activities declined tremendously due to lack of investment by the E & P (exploration and production) companies. Some of the reasons were largely attributed to the delay in the passage of the PIB, the 2016 global recession, and more recently, the emergence of the COVID-19 pandemic in 2020.
“The effects of the decline in the exploration activities cannot be over-emphasised. There was a noticeable decline in reserves growth from about 38 billion bbls of oil in 2008 to about 37.50 billion bbls as of 2023 and job losses by Geophysical and Geological Servicing Companies,” the commission said.
The publication disclosed that exploration activities gradually picked up from the fourth quarter of 2021 following the passage of the PIA. However, the decline was said to have returned due to the ongoing divestment plans by international oil companies.
“However, it was observed that exploration activities gradually picked up, especially, from Quarter-4 of 2021, following the passage of the PIA which provided favourable fiscal terms that appear to spur investors’ confidence in the nation’s oil and gas sector and the eventual end of the COVID pandemic.
“Shortly after that, it was noticed that exploration activities started declining again, probably due to the ongoing divestment discussions,“ the regulator said.
Suggesting the way forward to revive the declining trend of exploration activities, the NUPRC recommended that E&P companies should be encouraged to pursue aggressive exploration programmes to grow reserves by being made to drill, at least, an exploratory well yearly.
The regulator also recommended the acquisition of seismic data with a minimum record length of eight seconds TWT (Two-Way-Time depth) to ensure the exploitation of deeper prospects beyond 15,000 Feet TVDSS (true vertical depth subsea) around.
Other recommendations are: “Reprocessing of existing 3D seismic data with poor resolution using the latest processing algorithm/technology to improve subsurface image quality.
“Mandatory acquisition of 4D seismic data in fields/blocks that have been produced for over 10 years. Engaging E&P companies to fast-track the maturation of already identified leads and prospects.
“Incentivising and encouraging deep drilling into the high temperature and high-pressure regimes for deep play finds; and conducting regular bid rounds to attract more investment in the oil and gas industry.”
