According to a new report by the Organisation of Petroleum Exporting Countries, Nigeria’s crude oil reserves fell by 481 million barrels to 36.972 billion barrels in 2018.
The 2019 annual Statistical Bulletin of the oil cartel revealed that Nigeria’s oil reserves stood at 37.453 billion barrels between 2016 and 2017, 37.062 billion barrels during the year 2015 and 37.448 billion barrels in 2014
Here is why the reserves dropped: The report also showed that the number of oil rigs in the country climbed from 9 in 2016 to 13 in 2017 and then rose to 32 in 2018. The data from OPEC, however, indicated that as a result of the global oil price fall in 2014, the nation’s oil rig count dropped to 29 from the initial 46.
The 2014 slump in oil prices, also forced some oil firms operating in Nigeria to cut their capital budgets and also suspend some of their projects. This resulted in a drop in the number of oil rigs in the country.
2018 experienced an upward turn in the number of oil rigs, which was activated by the discontinued militant attacks on oil facilities within the Niger Delta region and also the rallying movement in the global crude oil prices.
The oil industry’s number of completed oil wells rose to 81 in 2018 from 76 in 2016 and 2017, after it earlier dropped to 116 in 2015 from 141 in 2014, the OPEC report revealed.
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According to the BP Statistical Review of World Energy 2018, Nigeria, with an approximated 37.5 billion barrels of crude oil deposit as at the end of 2017, possesses the second largest proven reserves in Africa.
Experts in the oil industry, who are familiar with the matter have expressed concerns for investors, whom they said will be wary coupled with the keen competition. They have also criticised what they called the “unnecessary uncertainty” caused by the hindrance in the passage of the Petroleum Industry Bill (PBI).
“Most oil companies in the country are mostly developing what they have. They are not looking for new reserves; you can’t sustain the oil and gas industry unless you are investing in new reserves.”
Current crude oil reserves: In February 2019, Nigeria’s crude oil reserves was 1,980 thousand daily barrels. Though there was a substantial swing in recent months, the reserves decrease through March 2014 to February 2019 period by ending at 1,980 thousand barrels per day.
What this means for Nigeria is that investors within the industry will be keen to seek out for alternative oil reserves for investment, thus, anticipating a higher return on investment. However, relative stability and rise in world crude oil price could contribute to foreign exchange earnings from the sector and also encourage the increase in daily production.