Despite internal turmoil that has killed thousands and destroyed towns, Iran and Libya are not only boosting oil production but they have also increased reserves and developed more oil wells in the last five years, but Nigeria has been on the decline.
Active oil exploration brings about a billion investments in the country’s economy as well as the development of related sectors of the economy and infrastructure. It also supplies new jobs for Nigerian citizens and brings about improvement of social and living standards in general while absence of oil exploration implies reverse of increased economic growth.
While Nigeria’s oil reserves have been on a decline in the last few years, Oil-rich Libya is taking a major step toward reviving its battered oil industry by reopening its biggest field Sharara after reaching a political settlement with main warring factions while Iran, on the other hand, is also increasing oil production despite the United States’ sanctions.
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Organization of Petroleum Exporting Countries (OPEC) data revealed Iran has increased its oil reserves from 158.4 billion barrels in 2015 to 208.6 billion barrels in 2019 while Libya who boast of Africa’s biggest oil reserves of 48.3 billion barrel have not only been able to stabilize oil production in the last four years but also increase its oil-producing wells from 35 in 2015 to 115 in 2019.
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The Libyan National Oil Corporation said in a statement on its website it has pumped over one million barrels a day, from a reported 800,000 barrels a day last week. The country’s oil production was under 100,000 barrels a day earlier in September.
Iran, one of the world’s major oil producers is also going against all odds to regain its market share lost to rivals due to the United States sanctions.
U. S’s Joe Biden president-elect has vowed to lift sanctions against Tehran and re-joined the Joint Comprehensive Plan of Action (JCPOA) nuclear deal, as long as Iran resumes compliance with all restrictions on its nuclear program.
The general consensus among many Iran watchers is that the country will be able to increase output now at 1.97million bpd and to use its crude and condensate inventories built up during the sanctions period to ramp up exports, once US sanctions are lifted.
Wall Street banks including Goldman Sachs Group Inc., JPMorgan Chase & Co., and RBC Capital Markets LLC see one million barrels per day (bpd) or more of Iranian crude supplied to the market next year after Biden emerged winner of the US elections.
For Africa’s biggest oil-producing country, the storyline is different. The country’s oil crude reserves, which stood at 38 billion barrels in 2015, have steadily declining over the past five years to 36.8 billion barrels in 2019 due to a combination of factors including lack of funds, security challenges in the main oil-producing Niger Delta region and uncertainty over the government’s oil sector reform that has stifled investment in new exploration programs.
“In the last four years Nigeria’s reserve replacement ratio has declined significantly. Low oil price meant most IOCs cut back on exploration activities and thereby further reducing replacement ratio,” Charles Akinbobola, energy analyst at Sofidam Capital Plc, told BusinessDay.
Considering Nigeria’s reliance on the oil and gas industry, one would expect that the Federal Government would do everything to ensure 100percent productivity in the sector. However, the reverse has been the case, with the situation getting worse with each passing year.
In this year’s outlook, Norwegian independent energy research firm, Rystad Energy expects Nigeria’s potential crude oil reserves to fall by 6 billion barrels due to a decade long debate on oil policy reforms.
The reduction of crude oil reserves has exposed the sorry state of Nigeria oil and gas industry, which is the main revenue earner of the country, an indication the country needs to do more in driving huge investment needed to sustain the sector.
The government’s many failings with attracting foreign direct investment most especially in the oil and gas sector have meant Nigerians have grown poorer as economic growth remains slower than population growth.
“Nigeria’s target of 40 billion barrels oil/condensate reserve by 2025 is a realistic and achievable target,” the Department of Petroleum Resources (DPR) Sarki Auwalu said at an online event last month.
