The Department of Petroleum Resources (DPR) has warned that a huge number of companies in the oil and gas sector will soon begin to leave Nigeria.
The Deputy Director and Head of Upstream Division at DPR, Mr Enorense Amadasu, said at a stakeholders’ workshop in Lagos on Thursday this will occur as a result of some oilfields reaching the end of their shelf lives due to lack or inadequate maintenance. He said in the next 10 years, most of these oil fields will become obselete, forcing operators to abandon them.
Mr Amadasu expressed concerns over the low level of exploration in the nation’s oil and gas industry, saying only one exploration well was drilled from January to September this year.
“There is a need for exploration and production companies to focus on exploration or things that will help to build additional reserves,” Mr Amadasu said at the meetin.
“For most of them, in another 10 years, if they continue to produce at the rate they are producing, they are going to get to the end of life of those fields,” he added.
According to him, the nation’s oil production has been sustained around two million barrels per day and 2.2 million barrels per day, pointing out that the technical allowable production stood at 2.7 million barrels per day in the first half of the year and 2.3 million barrels per day in the second half.
Mr Amadasu said, “We have all been given a target by government to take production to three million barrels per day by 2020.
“From the beginning of the first quarter to the end of the third quarter, we drilled only one exploration well.”
He further disclosed that there were seven appraisal wells, 99 development wells and 195 re-entry/workover wells in the nine-month period from January to September.
On his part, Mr Sarki Auwalu, the new Director of the DPR, said some had argued that the oil and gas reserves had almost dried up.
He said, “We know this simply isn’t the case. The Nigerian sedimentary basins are still open for business and with about 37 billion barrels remaining and a lot of yet to be explored potential, we will still be producing oil for decades to come.
“However, as the oil becomes more difficult and costlier to extract, new approaches are required to improve the economics of operating in the industry and regulating it efficiently.
“As a regulator, we know that there is much we can do to support additional production and maximise the potential of the Nigerian resources, working in partnership with the industry.”
Mr Auwalu stressed that there must be a deliberate reserve growth policy and financial incentives for operators to take on the challenges of tapping the increasingly hard-to-reach resources.
