Nigeria’ll increase crude oil reserves by one billion barrels

The Nigerian National Petroleum Corporation (NNPC) says the country will increase crude oil reserves by one billion barrels a year to reach the target of 40 billion barrels by 2020.

Maikanti Baru, Group Managing Director of NNPC, who spoke at Nigeria’s oil and gas conference and exhibition in Abuja, said the goal for 2018 and beyond was to increase crude oil reserves by one billion barrels year-on-year from the current 37 billion barrels to 40 billion barrels by 2020 and also increase the daily production of national oil to three million barrels per day.

Baru said security and the environment, high technical costs of the industry, investment financing, among others, as well as low crude oil prices, remain major challenges in the oil and gas sector.

He said the government has issued an updated oil and gas policy and has begun the process of adopting a new Petroleum Industry Governance bill that clarifies government institutions and their role in the industry.

Besides, he said the corporation would adopt the option of raising more finance from the capital market for new oil and gas projects. He noted that while domestic demand for gas in Nigeria remains unprecedented with a current daily realistic gas demand of 4,000 mmscfd, which is expected to grow exponentially to about 7,500 mmscfd in the next five years, within the next three years, the group would increase natural gas availability from the current 1.5 billion scf/d to about five billion scf/d in 2020.

In another development, the federal government says it will no longer approve oil and gas projects in the oil industry unless cost plans are adequate. Minister of State for Petroleum Resources, Ibe Kachikwu, said this at the conference and at the exhibition yesterday. He said the current cost of oil production in the country remained unacceptable.

“The government will supply enough gas to generate up to 15GW of electricity to the power sector by 2020 and stimulate gas-based industrialisation,” he added.

According to him, supply agreements will continue to be effective with conditions that guarantee bankability to provide the necessary comfort for producers. Meanwhile, the GMD said that in terms of frontier exploration, the corporation was hopeful that there would be drilling of appraisal well in the Benue trough in the third quarter of 2018.