NAPE decries depleting crude oil reserves in Nigeria

Nosa Omorodion

The Nigerian Association of Petroleum Explorationists (NAPE) has decried high rate of depleting crude oil reserves and urged the Federal Government and relevant stakeholders to do something fast that will promote new drilling for crude oil.

The President of NAPE, Nosa Omorodion, while addressing journalists vis-a-vis the association conference which will hold in November in Lagos, stated that the country’s reserves may deplete completely if nothing is done by policy makers to promote new discoveries.

According to him, “But our concern is that our replenish rate does not match our production rate. It is like you have money in the bank and you are withdrawing it, and you don’t have income to add to it. There will be a time you will run out of cash. If as it is today we do nothing, in next 30 to 35 years, we will completely run out of oil. The easy way out in times like this is to open your taps and produce.”

He said the government has raised a bar and set certain goals for itself. The goals include to achieve 2.8 million barrels per day by next year, to hit 40 billion barrels reserves by years 2020.

“How do you achieve that goal, how do you get there? You need to add average of 1billion barrels per annum, you need to add an average of 5.5 trillion standard cubic feet (tcf) per annum. To achieve those goals, you need to go outside your current comfort zone.

“Taking it to the next level, drilling deeper, which is the focus of this year’s conference, is regarded as a new frontier as well by explorationists. It is an opportunity to try and unlock the hydrocarbon that are seated in this every deep levels. Remember many years ago before we moved into deep water exploration, we used to explore at shallow waters.

“We have attempted to go beyond Niger Delta by exploring in Benue Trough, to Anambra Basin, Naomey Basin, Gongola Basin. That’s the thrust for the programmes that have been packaged for this year’s conference. All geared towards achieving one goal which the government has set to add one billion barrels per annum and add 5.5tcf of gas. To achieve that, we need to look beyond what we are currently doing. Nobody can do that but the oil finders who will find oil before you can produce. Now we have identified that the places where new discoveries can come from would be at the deeper levels,” he said.

Speaking further, the Chairman of Conference Planning Committee who also is the President-elect of NAPE, Abiodun Adesanya, argued that “Most of our drilling campaigns we have had up to date are sub-15000 feet. The deepest well in Nigeria, prior to couple of years ago has been about less than 15000 feet. Conoil blazed the trail in the last 2-3 years by drilling from angle where they got all the way to about 17000 feet. And that opens a new vista that there is still more to find. Of course it still more technologically challenging to get to that depth, but the technologies are available to do that job and that is where we are heading.

“So, we have people talking and discussing based on that particular theme to ensure we achieve it under a reasonable budget so that we don’t have an expensive campaign. The overall objective is for reserve addition. We need to ensure that our reserve replacement ratio is positive. That means the volume you are finding exceeds the volume that your producing. That way, you will remain in business.

“Despite the difficult times we are in, despite the challenges of recession, we will still come out with a successful conference because people have indicated interest to participate. All our booths have been sold out.”

Furthermore, he stated that Niger Delta is the country’s bread and butter undoubtedly. Within the Niger Delta, “we have still not taken that giant leap to the next stage by drilling deeper. Less than three per cent of the tire wells drilled in the country are above 15000 feet. So, most of them are below 15000 feet.”

Many have argued that there is need for new licensing rounds to be done by the federal government if the business of improving reserves should be taken seriously. But there is a lot that can be done without new licensing rounds to open up explorations. Exploration wells can be drilled today but due to economic reality, people may not have been doing it. If the fiscal terms are right, if the enabling environment is there, you can as well go for exploration well.

“Licensing round is one way, but you may ask the wells we have today, are they fully explored. Why are investors not exploring? Why do people have wells but are not drilling and exploring? Many blamed declining oil price. But if you go down the memory lane when exploration used to be very low, the federal government came up with some incentives, some MoUs geared towards encouraging exploration. That period was when we recorded the most astronomic growth in terms of exploration because incentives were put in place that encouraged people to go drill exploration wells.

“The giant discovery especially in deep water averagely takes about 8-10 years to bring on stream. It takes a while to bring new discoveries to fruition. So if you are depleting and not doing anything to replenish it, that’s a big concern. If you make a discovery today, it may take like eight years before it comes on stream and with this, it means there is a huge gap,” he concluded.

The 34th Annual International Conference and Exhibition will hold between November 14 and 17, 2016 in Lagos.