The Nigerian Upstream Petroleum Regulatory Authority had reported a concerning decline in the country’s oil reserves over the past 14 years.
The NUPRC stated that between 2008 and 2023, oil reserves decreased from 38 billion barrels to 37.50 billion barrels.
The NUPRC attributed this in a publication to the massive drop in exploratory activity brought on by exploration and production companies’ lack of investment.
The NUPRC argued that the COVID-19 pandemic and other circumstances, including the delay in enacting the Petroleum Industry Bill, were to blame for the lack of investment from oil firms.
It was gathered that geophysical and geological service companies also lost employees as a result of this.
“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 report revealed that after the PIA was passed, exploratory efforts progressively increased starting in the fourth quarter of 2021.
However, it stated that the continued divestiture plans by multinational oil companies were the reason why the decrease had resurfaced.
“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.
The NUPRC suggested that in order to reverse the downward trend of exploration activity, E&P companies should be compelled to drill at least one exploratory well every year in order to incentivize them to pursue ambitious exploration programs that will increase reserves.
Additionally, the regulator suggested that in order to guarantee the exploitation of deeper possibilities above 15,000 feet TVDSS (true vertical depth subsea), seismic data should be acquired with a minimum record length of eight seconds TWT (Two-Way-Time depth).
“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.”
