• Crude price drops to $81.14 as oil sheds $2 on recession fears’
Nigeria’s oil and condensate reserves declined by 0.22 per cent January 1, 2022 to 36.966billion barrels on January 1, 2023, Nigerian Upstream Petroleum Regulatory Commission (NUPRC) while oil prices slid by about $2 a barrel to their lowest level since late March yesterday, dragged lower by fears a possible recession could dent fuel demand and after a rise in U.S. gasoline inventories.
Brent crude futures were down $1.98, or 2.4per cent, to trade at $81.14 a barrel. West Texas Intermediate crude (WTI) futures dropped $2.05, or 2.6per cent, to $77.11 a barrel.
Both benchmarks had fallen two per cent the previous day and are at their lowest since late March, just before a surprise OPEC+ production cut announcement.
NUPRC Chief Executive Officer, Engr. Gbenga Komolafe in a presentation entitled: “Pivoting Upstream Petroleum Regulation and Investment,” session at the 6th Nigerian International Energy Summit (NIES) in Abuja, blamed the decline in oil and condensate reserves in the country on low exploration activities in the sector.
He however said the country’s total natural gas reserves rose to 208.83trillion cubic feet on January 1st, 2023.
Komolafe noted that the marginal increase in natural gas reserves was due to innovations, additional from new wells and field development studies.
The NUPRC CEO said: ‘It is therefore my pleasure to declare the National Hydrocarbon and Gas Reserves as at January 1st 2023 as follows: “Nigerian’s oil and condensate reserves as at January 1st 2023 stands 31.060 billion barrels as and 5.906 billion barrels of condensate, making a total of 36.966bb of oil and condensates, while the associated gas reserves is 102.32trillion cubic feet, non-associated gas reserves is 106.51 trillion cubic feet, making a total 208.83tcf of natural gas reserves.
“The oil and condensate reserves declined of 0.22per cent compared to the January 1st, 2022 figures is attributable to low exploration activities in the sector and sound mission arising from surface studies in year 2022.
“On the other hand, the slight increase of 0.10 per cent gas reserves over January 1st 2022 reserves position , is primarily attributable to innovations of additional from new Wells and field development studies.”
He also revealed that the country’s average rig count increased from 10 in 2022 to 24 in 2023.
Komolafe, who recalled that increasing competition from regional peers has led to decrease in the proportion of the overall upstream investment attracted by Nigeria, however, added that the country’s investment rebound this year.
He said: “And the implication of this is the signal to the fact that investment is gradually trickling into the Nigerian upstream sector.”
On rig count average, he said Nigeria had 17 active rigs in 2019, representing one of the highest hands from the African continent. As at then, Nigeria’s average rig count declined to 11 in 2020. 7 in 2021, 10 in 2022 but recently grew 24 in 2023.
Komolafe said this is also a reflection of investors’ acceptance of implementation of the Petroleum Industry Act (PIA).
He revealed that 2021 to 2022, the annual global investment in clean energies sources and technologies specially relevant to the energy transition increased by 31per cent, representing the highest investment increase since 2010.
Governments, according to him, are supporting major Research and Development (R&D) for demonstration in key areas such as low emissions, hydrogen and lithium, and lithium – free batteries from electric vehicles.
Komolafe said other Organization of the Petroleum Exporting Countries (OPEC) such as Iran, Iraq, Algeria, Libya and Angola equally witnessed increases in their real terms.
He said however following two years of high energy crisis, the global oil and gas industry is experiencing a boom that could be directed to capital investment in upstream.
“Projected outlook over the next three years is positive. And as an industry, we need to leverage on this opportunity by doing all that is necessary to attract more investments and revive the Nigerian upstream sector.
“As opposed to the defunding of fossil fuel projects, global investments in Nigeria R&D, innovations in renewables and clean technologies are increasing even at the peak of COVID-19 pandemic as government raised the stay on track with net zero emissions by 2060,” Komolafe said.