Dwindling oil reserves

But is there cause for alarm in Osaho’s apparent alarm. Not necessarily. Some analysts have dismissed the notion that reserves are about to be depleted. The former presidential adviser on petroleum Dr Emmanuel Egbogah claimed that there could be 100 or 200 years of reserves left. But there is agreement that until such a time […]

But is there cause for alarm in Osaho’s apparent alarm. Not necessarily. Some analysts have dismissed the notion that reserves are about to be depleted. The former presidential adviser on petroleum Dr Emmanuel Egbogah claimed that there could be 100 or 200 years of reserves left. But there is agreement that until such a time as the Petroleum Industry bill (PIB) becomes law the situation will not improve. In contrast, the outgoing Regional Executive Vice-President of Shell Ms Ann Pickard said that the PIB is a “cumbersome document which could worsen the situation” if implemented. She claimed that it would make the Nigerian production sharing contract (PSC) the harshest in the world despite Nigeria’s high-risk environment.  Somewhat in agreement with this view, the Nigerian Association of Petroleum Explorationists (NAPE) said the reserves are dwindling because the federal government has not provided adequate incentives to encourage exploration.  
  Due to the opaqueness of accounting and record keeping in Nigeria’s oil industry, there are several and conflicting figures regarding the country’s actual –or even potential- oil reserves. The DPR figure of 35 billion barrels means that, taking account of current daily output of 2.5 million barrels, the country has some thirty five years of reserves left. That sounds like a long time; it is not.
 Osahon noted efforts of the Nigeria National Petroleum Company (NNPC) in the search for oil in the inland basin, but said that a lot needed to be done to increase reserves, particularly “exploration, exploration, exploration”.
But Osahon seemed to have ignored the fact that the rest of the world is moving away from hydrocarbons and exploring more modern environmentally friendly and cost-efficient means of producing energy. The fall in Nigeria’s known or potential reserves should however serve as a wakeup call to join the rest of the world in moving away from fossil fuels. Policy shifts that would encourage this movement and reduce dependence on oil as a means of energy and as a major source of income are therefore needed. Many of the world’s strong economies do not produce oil. Indeed it seems paradoxical that countries which do not have oil are sufficiently well off economically to purchase oil from oil producing nations like Nigeria. It makes more sense to look for and develop alternative energy sources until such a time the country has developed enough capacity to utilise the raw materials from petroleum for its industrialization.
Forecasts by various organizations indicate that global demand for energy will continue to rise and a significant part of this will be for fossil fuels. The cry for more exploration is a tacit admission that Nigeria’s revenues have not been put to proper use. Economies such as Dubai which were founded during the oil boom years have long abandoned their dependence on oil revenues for national growth. No major investments have been recorded in exploration in the last five years and many oil and gas experts are of the opinion that it is better for Nigeria to leave its oil under the ground as reserves than to be produced and the proceeds frittered away. The bottom line in all this is that there is a future without oil in Nigeria, and the country should begin now to prepare for it.