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Nigerian Oil Industry Good For 40 More Years

by Carmen Gentile
Washington DC (UPI) Mar 07, 2008
Nigeria's oil reserves will be depleted in 43 years, the shortest reserve life of any OPEC nation, according to a recent report.

The Petroleum Products Pricing Regulatory Agency noted in its latest findings that Africa's largest oil producer has the shortest shelf life for its reserves among members of the Organization of Petroleum Exporting Countries whose reserve totals were calculated in the study.

Oil reserve estimates were not presented for Algeria, Angola and Ecuador, which rejoined OPEC late last year.

The lifespan of Nigeria's oil industry was calculated based on an estimated reserve of 36.2 billion barrels and a current output of about 2 million barrels per day. Its reserves are considered small compared to OPEC's top producers. Saudi Arabia has an estimated reserve of 259 billion barrels, according to the Energy Information Administration, while Iraq is said to have 115 billion barrels of oil.

Nigeria's reserves could, however, realize their full potential in offshore deepwater drilling, said analysts at the EIA, the data arm of the U.S. Department of Energy.

Officials in Abuja and foreign oil firms are hoping to increase Nigeria's oil output and reserve total considerably in the coming years with the advent of increased drilling some 20-30 miles from the oil-rich, albeit violence-plagued, Niger Delta.

"That number (barrels per day produced) is likely to increase as the deepwater reserves exploration increases," noted Elias Johnson, an EIA energy analyst for Africa.

Were Nigeria to reach its full potential for exploration and increase its production, the lifespan of the reserve will likely remain the same, Johnson said.

Nigeria's offshore potential has been much heralded in recent years, particularly among foreign oil companies that have been repeatedly targeted by the delta's militant groups since hostilities against the industry began increasing around the end of 2005 with the emergence of the Movement for the Emancipation of the Niger Delta.

Those platforms more than 20 miles offshore are considered by many to be safe from militant attacks, which have left dozens dead in recent years.

Considered the delta's largest militant group, MEND and other armed forces express their anger toward the oil and gas industry, as well as the Nigerian government, by attacking petroleum stations and kidnapping oil workers.

Despite generating an estimated $300 billion in oil revenue since the 1970s, most Nigerians remain in poverty, a condition that has given rise to the violence that has affected production in Nigeria -- for both state and foreign oil firms.

Militant groups assert that residents of the Niger Delta should receive a greater portion of the oil wealth reaped by the government and foreign companies. Attacks have taken a heavy toll on production, according to Nigerian energy officials, who contend oil production is down 20 percent to 2 million barrels per day.

Nigeria's largest foreign oil producer, Royal Dutch Shell, has been hampered repeatedly by attacks on its installations. In January Shell shut down operations at its Forcados terminal following pipeline attacks that threw its 100,000 bpd production offline.

The terminal had already been shut down once before because of violence and reopened in October 2007 after more than a year of halted production. Since its reopening, the facility, which can produce some 450,000 barrels per day, had been operating at a fraction of its capacity.

But on a positive note, officials earlier this week announced that force majeure of the Forcados exports would be lifted as the repairs to the attacked pipeline were completed.

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China's biggest oil producer in talks with Qatar: report
Shanghai (AFP) March 5, 2008
China National Petroleum Corp., the country's biggest oil and gas producer, is in talks with Qatar Petroleum to set up a petrochemical joint venture in China, Chinese state media said Wednesday.

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