Nigerian oil reserves would peak at about 40.1 billion barrels in 2015 to 2016, before coming down to 36 billion barrels by 2021, predicts Business Monitor International (BMI) in its Nigeria Oil and Gas Report Q1 2013.
The report, which includes five-year forecasts to 2017, reveals that gas reserves are expected to peak at 5.95 trillion cubic metres (tcm) in the 2014-2019 period, before falling back to 5.80 tcm in 2021.
BMI expects oil production to increase from an estimated 2.2 million(mn) barrels per day (bpd) in 2012 to 2.62mn bpd by 2021, as ambitious projects such as Usan (180,000 bpd) and Egina (150,000 bpd – 200,000 bpd) come on stream.
If the BMI oil reserves prediction comes true, it means Nigeria would have achieved its 40,000 billion barrels of oil reserves five years earlier than anticipated.
The Nigerian National Petroleum Corporation (NNPC) had already expressed its commitment to increase the nation’s crude oil reserves from its current level of 37 billion barrels to 40 billion barrels and daily crude oil production to 4 million bpd by the year 2020, in order to ensure that a solid platform is laid for the rapid economic growth and development of the country.
Nigeria’s production of crude oil currently averages at 2.4 million bpd, down from an all-time high of 2.7million bpd recorded in July 2012.
BMI forecasts consumption of crude to rise at an annual average of 6.29 percent rate between 2011 and 2021, boosted by anticipated strong GDP growth.
We forecast consumption rising from an estimated 286,000 bpd in 2011 to 549,000 bpd by 2021, says the report.
BMI forecasts gas production increasing from an estimated 34.71 billion cubic metres (bcm) in 2011 to 82.61 bcm by 2021, as the authorities and companies reduce the practice of flaring and start monetising associated gas resources.
Diezani Alison-Madueke, minister of Petroleum Resources, had said that the country would by 2014 reduce gas flaring during oil production to two per cent.
The minister, who spoke at the Nigeria Oil and Gas conference in February, said the country had succeeded in reducing gas flaring to less than 11 per cent, compared to 30 per cent in 2010.
BMI reckons that attempts to cut gas flaring would boost the outlook for gas production, but that OPEC (Organisation of Petroleum Exporting Countries) quotas, the risk of project delays and the country’s political environment, particularly in relation to the PIB (Petroleum Industry Bill), still imply a significant amount of uncertainty.
According to the BMI report, gas demand is set to rise at an annual average growth rate of 8.6 percent. Booming demand from the government’s ambitious power sector plans and large export engagements will thus bolster production growth. We see Nigerian gas consumption rising from an estimated 5.22 bcm in 2011 to 13.2 bcm by 2021.
Crude oil accounts for 80 percent of the Nigerian government’s revenue and more than 90 percent of its foreign-currency income.