The Nigerian Upstream Petroleum Regulatory Authority (NUPRC) reveals that the country’s oil reserves have decreased by 50 billion barrels over the past 14 years. According to the NUPRC, oil reserves shrank from 38 billion barrels to 37.50 billion barrels between 2008 and 2023.
The authority attributed this decline to a sharp reduction in exploration activities, driven by a lack of investment from exploration and production companies. The NUPRC stated that the lack of investment by oil companies could be attributed to several factors, including the delay in passing the Petroleum Industry Bill and the impact of the COVID-19 pandemic. It was also noted that these challenges contributed to job losses in geophysical and geological servicing companies.
As indicated by the commission, “It has been observed that in the last 10 years, exploration activities declined tremendously due to lack of investment by the exploration and production (E & P) 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 overemphasized. 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 publication revealed that exploration activities began to increase, particularly from Q4 of 2021, after the passage of the PIA, which offered favourable fiscal terms that boosted investor confidence, along with the end of the COVID pandemic. However, the regulator noted that exploration activities soon started to decline again, likely due to ongoing divestment discussions.
The NUPRC recommended that E&P companies be encouraged to implement aggressive exploration programs to increase reserves, including the requirement to drill at least one exploratory well annually, in order to reverse the declining trend in exploration activities.
The regulator also suggested acquiring seismic data with a minimum record length of eight seconds TWT (Two-Way-Time depth) to facilitate the exploration of deeper prospects beyond 15,000 feet TVDSS (true vertical depth subsea). Other suggestions include reprocessing existing 3D seismic data with poor resolution using the latest processing technologies to enhance subsurface image quality, mandating the acquisition of 4D seismic data in fields or blocks that have been in production for over 10 years, and engaging E&P companies to accelerate the maturation of already identified leads and prospects.
