DPR warns oil producers against depleting reserves


A number of oilfields in Nigeria will reach the end of their shelf life in the next 10 years if nothing is done, the Department of Petroleum Resources warned producers on Thursday.



The DPR expressed concern over the low level of exploration in the nation’s oil and gas industry, saying only one exploration well was drilled from January to September this year.



“There is a need for exploration and production companies to focus on exploration or things that will help to build additional reserves,” the Deputy Director and Head of Upstream Division, DPR, Mr Enorense Amadasu, said at a stakeholders workshop in Lagos.



Amadasu said in his presentation that some companies would have to “pack their stuff and leave” in the next few years if they did nothing.



“For most of them, in another 10 years, if they continue to produce at the rate they are producing, they are going to get to the end of life of those fields,” he added.



According to him, the nation’s oil production has been sustained around two million barrels per day and 2.2 million bpd.



He said the technical allowable production stood at 2.7 million bpd in the first half and 2.3 million bpd in the second half.



Amadasu said, “We have all been given a target by government to take production to three million bpd by 2020.



“From the beginning of the first quarter to the end of the third quarter, we drilled only one exploration well.”



He said there were seven appraisal wells, 99 development wells and 195 re-entry/workover wells in the nine-month period.



The new Director, DPR, Mr Sarki Auwalu, said some had argued that the oil and gas reserves had almost dried up.



He said, “We know this simply isn’t the case. The Nigerian sedimentary basins are still open for business and with about 37 billion barrels remaining and a lot of yet to be explored potential, we will still be producing oil for decades to come.



“However, as the oil becomes more difficult and costlier to extract, new approaches are required to improve the economics of operating in the industry and regulating it efficiently.



“As a regulator, we know that there is much we can do to support additional production and maximise the potential of the Nigerian resources, working in partnership with the industry.”



Auwalu said there must be a deliberate reserve growth policy and financial incentives for operators to take on the challenges of tapping the increasingly hard-to-reach resources.
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