Nigeria’s Oil Reserves Shrink by 50 Million Barrels Over 14 Years
Nigeria’s oil reserves have dwindled by 50 million barrels over the past 14 years, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), dropping from 38 billion barrels in 2008 to 37.5 billion barrels in 2023. The NUPRC attributes this steady decline to a slump in exploration investment and activity, a trend largely driven by delays in policy reform and external economic pressures.
In a recent report, the NUPRC cited the long delay in passing the Petroleum Industry Bill (PIB) as a significant barrier to fresh investment, alongside global factors like the 2016 recession and disruptions caused by the COVID-19 pandemic. The resulting slowdown in exploration has not only reduced reserves but has also led to widespread job losses in Nigeria’s geophysical and geological services sectors.
“Exploration activities have seen a tremendous decline over the last decade due to lack of investment from exploration and production (E&P) companies,” the NUPRC stated. “This lack of confidence was exacerbated by delayed passage of the PIB, which only came into effect as the Petroleum Industry Act (PIA) in 2021, alongside economic challenges such as the 2016 recession and the COVID-19 pandemic in 2020.”
Although exploration briefly revived in 2021 after the passage of the PIA, providing favourable fiscal terms to investors, the commission noted that activity slowed again as international oil firms initiated divestment plans from the region.
“Exploration activities showed some recovery in the fourth quarter of 2021, driven by the PIA and the post-COVID economic rebound,” NUPRC explained, “but this progress has since tapered off due to international firms’ divestment discussions.”
To counteract this decline, the NUPRC has recommended that E&P companies adopt a more aggressive exploration strategy, proposing that each company be required to drill at least one exploratory well per year. The regulator also emphasised the importance of acquiring advanced seismic data with a minimum record length of eight seconds, which would enable exploration at greater depths.
Additional recommendations from the NUPRC include reprocessing outdated 3D seismic data to improve subsurface imaging, mandatory acquisition of 4D seismic data for fields that have been in production for over a decade, and incentivisingdrilling into high-pressure, high-temperature zones to unlock deeper oil plays.
The commission further urged that Nigeria should conduct regular bid rounds to attract new investment into the sector, thereby bolstering exploration efforts and ensuring a long-term recovery in reserves.
As Nigeria’s oil reserves remain a critical component of its economy, stakeholders are watching closely to see if these recommendations, combined with improved regulatory policies, will rejuvenate the nation’s exploration and production landscape.
