Nigeria’s Oil Reserves will Run Dry In 49 Years – DPR
“ The nation’ s depletion rate and life index are 2. 04 per cent and 49. 03 years respectively, ” the regulator said .
The reserves depletion rate is a measure of 2018 total oil and condensate production divided by the reserves as of January 1, 2019, according to the DPR .
“This indicator gives a bird ’s eye on an annual basis , what percentage proportion of the quoted reserves was produced. The life index , on the other hand , is a measure of the reserves as of January 1, 2019, divided by the total production in 2018 . This parameter highlights how long ( in years) quoted reserves volumes will be available for production .”
“Perhaps , the companies may have taken advantage of the poor government take in the deep offshore terrain to deplete the reserves therein with little regard for long- term sustainable production as amplified by the life index ,” the regulator said in a report.
It said the sole risk companies had the lowest depletion rate of 1. 5 per cent and the highest life index of 65. 49 years.
The regulator said these companies accounted for about 20. 14 per cent of the nation’ s total production in 2018, adding, “ This depletion rate does not reflect the fact these companies hold the second largest reserves of about 26.90 per cent. ”
The marginal field operators produced about 2 .14 per cent of the nation’ s total production in 2018, with a depletion rate of about 2. 7 per cent, life index of 36 .83 years and a national reserves portfolio of 1. 61 per cent.
The DPR said about nine operating companies , which it described as “ unhealthy ” , “ have oil and condensate life index of less than 15 years.”
“The statistics paint a very gloomy picture for these companies and urgent steps will be taken to address this observed trend. The department is engaging the companies to review their strategic plan to guarantee future reserves growth in order for them to remain in business, ” it said .
According to the regulator, as of January 1, 2019, the reserves replacement ratio, which measures the addition to reserves relative to the total production , for Nigeria’s oil and condensate reserves stood at four per cent.
It said “ Though this shows a positive RRR , it is not an impressive performance as just four per cent of the 2018 annual production was replaced via net addition to reserves.
He warned that most of the resources might have to be left in the ground if not explored and produced before the world moves away from oil .
He said, “If there is a lot of exploration , we believe that a lot of oil still remains to be found in Nigeria. And that is the beauty about Nigeria. Nigeria is not yet a mature territory; it is still very prolific.”
“There has been no targeted exploration for gas and yet we have 200 Tcf reserves. So, we believe that if we really go out looking for gas, we can find a lot more that will put us in the league of the most prolific in the world .