Thursday, October 11, 2012

Nigeria Sees First Reserves Decline Since 1950s

According to Nigeria’s Department of Petroleum Resources (DPR) the country has experienced its first drop in reserves since the 1950s. The director of the DPR, Austin Olorunsola, told Leadership newspaper on the sidelines of a meeting with the House of Representatives Committee on Petroleum Resources (upstream) on the implementation of the 2012 budget that the matter was a “real concern.”

“Today, what we have in the books is roughly 36.5 billion barrels in crude oil reserves as against 37 billion barrels two years ago. Whereas what we were planning for was 40 billion barrels. We really need to work very quickly to turn that trend around,” Olorunsola said.

The drop in reserve replacement can be attributed to a drop in exploration investment over the uncertainty over the PIB.

“We are really concerned because if you look at the reserves trend since 1956, we have always had an incline; we always had a marginal increase on year by year basis. Even the years we don’t particularly have increases, the reserves we discover was able to offset the production for that particular year, therefore having zero impact at the end of the day,” Olorunsola said.

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