‘Nigeria exceeds 40bn oil reserves target’

Nigeria’s quest to grow its oil reserve target of 40 billion barrels has been achieved earlier than the targeted 2010 deadline, the country’s geoscientists’ chief has revealed.

Growing the nation’s recoverable oil reserve has been at the fore of the federal government’s twin vision for improving exploration and production in the upstream petroleum sector; the other is raising oil output to four million barrels per day by 2010. This drive has been on since 2003.

Victor Agbe-Davies, president of the Nigerian Association of Explorationists (NAPE), disclosed in Lagos last week that the oil reserve target for next year has been surpassed.

“We’ve surpassed the 40 billion barrel mark now in terms of reserve and these are from newer fields. The only thing is that our daily production is still hovering around 2.4 million barrels of oil per day. Geoscientists have been busy in all the oil companies and the exploration team have been busy looking for reserves and they’ve been able to get additional reserves.”

Nature of the oil reserves

The reserves are book reserves based on the prospects that have been identified and those that have been drilled. However, more drilling needs to be carried out to determine the extent of the fields concerned.

Mr Agbe-Davies revealed that the international oil companies are responsible for achieving this. “We’re talking about the all the big companies, we’re talking about Total, Shell, Chevron, Agip ... all the big companies have been at the fore because they’re the ones that have the deeper pockets. They can’t make any announcements now because they’re not being produced.”

It is when actual oil production commences that the oil companies announce figures.

Although there has not been an official announcement from the oil companies, the Department of Petroleum Resources (DPR), the industry regulator, or the Nigerian National Petroleum Corporation (NNPC), the most recent data from the DPR indicates the likelihood of this development.

Reserve position as at the third quarter of 2009 was 38.61 billion barrels. “There is an observed net increase of 480 million barrels against January 2008 reserves, representing 1.46 percent increase,” according to DPR data.

This is despite no exploration wells spudded during the last quarter. However, 40 developmental wells were drilled during the same period.

During the quarterly briefing held last week, Billy Agha, a director at the DPR, said the regulatory agency has commenced the auditing of oil and gas reserves for all Exploration and Production companies towards the end of the third quarter.

“The exercise is to validate and authenticate the reserve figures to DPR by the companies.”

The Department of Petroleum Resources said that the country’s oil reserve will hit 40 billion barrels by 2010.

Deep water operations

Offshore fields in deep water Nigeria have continued to play a significant role increasing oil output and growing the reserves.

Although Mr Agbe-Davies said, “fields onshore, in shallow water, and deep water” contributed to attaining the target, it is noticeable that the Production Sharing Contracts assets in the deep offshore areas accounted for the bulk of the reserve growth.

Mr Agha confirmed that “the bulk of the increase is coming from the deep and ultra deep offshore.” Besides, he noted, there are three categories of reserves- proven reserves, probable reserves and possible reserves.

He added that some development wells upon first drilling might not have any reserves, but on further and deeper drilling will yield hidden reserves.

Most of Nigeria’s giant fields in the last two decade have come from deep water; fields like Agbami, Erha, Akpo, and Bonga.

The NAPE boss enthused that the reserve figures could reach as high as 50 billion barrels by the end of next year.

“The deep offshore has a very important role to play in reserve growth because most of the big finds will come from the deep offshore,” he said. “And that means that companies are doing the right thing now by ensuring that they revisit all the data they have on the deep offshore to be able to grow more reserve. I believe this will yield result.”