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    Nigeria revises total oil reserves to over 37bn barrels; gas to 208TCF as of January 2022

    ByBassey Udo

    May 7, 2022

    By Bassey Udo


    Nigeria’s total national oil and gas reserves increased marginally in 2022 from the levels attained prior to the establishment and implementation of the Petroleum Industry Act 2021, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has revealed.

    The Chief Executive Officer of the Commission, Gbenga Komolafe, said in his maiden formal media interaction in Abuja on Friday that the country’s oil and condensate reserves status recorded a slight increase by about 0.37 percent, 37.046 billion barrels as at January 1, 2022, from about 36.910 billion barrels in January 1, 2021.

    Also, the national gas reserves status, which stood at about 206.53 TCF as at January 1, 2021, increased by 1.01 percent, as of January 1, 2022, to about 208.62 trillion cubic feet (TCF).

    The latest figures, the NUPRC CEO, said followed an analysis of the 2021 annual report on reserves submitted by the 61 operating oil and gas companies in the country in compliance with the requirements in the PIA, 2021.

    Sections 7(i), (j), (k) and (r) of the PIA 2021 require all operating exploration and production companies in the country to submit their annual report of reserves to the Commission.

    Initiatives to boost oil, gas outputs
    During the briefing, the CEO unveiled a number of proactive initiatives by the Commission to further boost the country’s crude oil and gas production, by taking advantage of current global market realities as a result of the upsurge of crude oil prices to $106.25 per barrel at the international market and disruptions in gas supply due to the current Russia-Ukraine war.

    In unfolding those initiatives, the NUPRC said it took into consideration factors militating against the country’s efficient and effective exploration and production operations, while identifying those that would ensure a more deliberate and swifter implementation of strategies to guarantee increased crude oil and gas output and reserves.

    Apart from taking Inventories of all shut-in oil wells as well as the reasons for their shut-in through the analysis of the inventory, to map and devise measures for quick reopening, the NUPRC boss said the Commission was also using well and reservoir surveillance activities to identify poorly performing wells and workover candidates for quick interventions.

    Also, he said the Commission deployed new technologies and advanced recovery techniques for unlocking some identified stranded oil and gas resources.

    Enhancing gas production
    On specific initiatives to boost gas production, Komolafe said the current conflict between Russia and Ukraine, and the resultant disruptions to the global gas demand-supply chain, provided Nigeria an opportunity to take advantage of and bridge the gap, through the implementation of several natural gas developmental initiatives.

    In line with the Federal Government 2021-2030 “Decade of Gas” agenda, he said the Commission has taken steps to expand and develop the country’s huge gas resources, through enhanced gas exploration, development and utilization schemes expected to boost gas production, maturation of domestic and export gas market, as well as gas flare elimination.

    Currently, he said the Commission was engaging all lessees on their Natural Gas Flare Elimination and Monetisation Plan, to ensure compliance with Section 108 of the PIA and boost supply to the rapidly growing gas market.

    In addition, Komolafe said considering the global energy transition and the need for cleaner sources of energy, gas was being positioned as Nigeria’s immediate transition fuel, to lower the country’s carbon emission footprint, we in line with her climate change commitment.

    Again, he said the Commission was encouraging investors to leverage on the generous gas fiscal incentives in the PIA, namely the zero hydrocarbon tax, reduced royalty rates, tax consolidation provisions, to make Final Investment Decisions on proposed upstream projects.

    With Nigeria’s proven gas reserve base now 208.62TCF, he said Nigeria was on track to increase her reserve volumes to 220 TCF in the next 10 years and 250 TCF thereafter.

    From Nigeria’s current gas production of about 8 billion standard cubic feet per day (BSCF/D), he said 20 percent was delivered to the domestic market, and approximately 40 percent exported to international markets, while 30 was being utilised for producer’s internal consumption, with the excess gas flared.

    For the Commission to drive gas production growth, the NUPRC Chief said the annual Domestic Gas Delivery Obligation (DGDO) has since been issued to all lessees based on the provisions of the PIA, to allow the operators to balance their exports with increasing domestic gas supply.

    Other initiatives being implemented by the Commission to increase gas production and utilisation, Komolafe said, include commencement of mandatory conduct of gas well deliverability tests for all gas producers to establish their operating limits.

    This arrangement, he explained, would enable the Commission to determine production potentials and guide the industry towards its maximum optimum capacity.

    Besides, he said constant engagement with the operators on the need to drill below the conventional oil window, to target gas-rich zones for production and increase the nation’s gas reserves.

    He also spoke about efforts to steer operators with saturated reservoirs to ensure their well placements drove optimal exploitation of oil and gas resources.

    At the moment, he said the Commission was revising the Flare Gas (Prevention of Waste and Pollution) Regulations 2018 and its associated guidelines to incorporate methane emissions capture, to ensure the elimination of gas flaring/venting and monetisation of gas resources in the country.

    The implementation of the provisions of the PIA 2021 on Gas Flare Elimination and Monetisation, as a means of unlocking more gas availability to the market, he said was ongoing, with companies committing to a plan to eliminate gas flaring by bringing the commodity to the market.

    The Commission, he said, has also stepped up effort to accelerate the facility development and debottlenecking projects, as incentives to gas production from the upstream sector to meet midstream and downstream demands, in addition to the enforcement of approved associated gas development solutions in all applicable oil development.

    Curbing menace of crude oil theft

    On crude oil theft, Komolafe said in line with the Presidential directive on the issue, the Commission evolved additional initiatives to collaborate with oil and gas operating companies (including Nigerian National Petroleum Company (NNPC) Limited and the Nigerian Security Forces, to end the menace of crude oil theft in the country.

    To validate the actual crude oil theft figures in the upstream petroleum industry, the regulator said it has commenced full-scale audit of crude oil theft and assessment of upstream assets integrity, to correct the recent controversial figures thrown up by some industry operators, which negatively impacted Federation revenue.

    On the advanced cargo declaration regime, Komolafe said the NUPRC has obtained the necessary approvals, to curtail export of stolen crude oil.

    Henceforth, he said crude oil and gas cargoes from Nigeria would have a unique identifier confirming all documentation regarding the exported consignment.

    By implication, he said, any cargo without the unique identifier would not be legitimately exported from the country.

    Similarly, to control the lease of the automatic custody transfer units, he the, NUPRC, in line with its Statutory duties obtained necessary approvals for the installation of metering equipment in the upstream petroleum industry using Original Equipment Manufacturers (OEMs) to avert potential manipulation of figures and loss of revenue.

    Providing an update on the PIA 2021, the Commission said all the regulatory processes have been established, to eliminate or minimize obstacles towards seamless upstream petroleum operations.

    Consequently, the Commission, in collaboration with the Presidential Steering Committee, developed some key Regulations for the upstream petroleum sector in line with Section 216 (4) of the PIA, 2021.

    Some of the regulations provide for a consultation forum to confirm input from all stakeholders in the upstream petroleum operations prior to the finalization of regulations.

    As a result of the recent draft Regulations harmonization exercise, he said the Commission updated six key regulations, namely Conversion and Renewal (Oil Prospecting Licences & Oil Mining Leases) Regulations; Petroleum Licensing Round Regulations; Upstream Petroleum Fees & Rent Regulations; Petroleum Royalty Regulations; Domestic Gas Delivery Obligations Regulations, and the Petroleum Host Community (Upstream) Regulations.

    The update on the regulations involved the incorporation of the concerns by interest groups, including representatives of the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry; Independent Petroleum Producers Group (IPPG), and National Assembly, as well as host communities from Ondo, Delta, Imo, Anambra, Abia, Akwa Ibom and Bayelsa States.

    To become operational, Komolafe said the harmonised regulations would soon be forwarded to the Federal Ministry of Justice for vetting, while the final regulations would become operational later by the first week of June 2022.

    The first beneficiaries of the harmonised regulations, the NUPRC boss said, would be the awardees of the 57 2020 marginal fieldPetroleum Prospecting Licenses (PPLS).

    In line with the PIA 2021, the Commission said it has prepared Model Licences and Leases, and delineation of 57 areas of marginal Fields awarded under the 2020 Marginal Field Bid Round, to facilitate the issuance of Petroleum Licence to the Marginal Field Awardees that formed special purpose vehicles (SPVs) as required under the bid guidelines.

    In line with Section 314 of the PIA, 2021, Komolafe said the Commission has completed the implementation of the delineation of staff between the regulatory authority and the Midstream/Downstream Petroleum Regulatory Agency.

    As a result, he announced the commencement of manpower audit, job mapping and capacity building programmes to ensure optimization of human capital.

    The Commission has equally completed the unbundling of the Enterprise Data Warehouse (EDW) from legacy Department of Petroleum Resources (DPR) as well as implemented the automation of the Revenue Ledger and Information System (RLIS) portal for companies to submit all local and foreign royalty payments; the National balance of payment portal for reporting inward and outward direct investment associated with crude oil export; development of Asset Management Web Portal (AMWP) for Marginal Fields and petroleum facilities, a ndNUPRC e-library, to provide access to all internal resources, including checklists, SOPs, templates and reference materials.

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