211 Stagnant Oil Blocks Worsen FG’s 40b Oil Reserves Woes

Crude oil
Crude oil

The Federal Government’s 2020 target for 40 billion crude oil reserves may be a forlorn because 211 oil blocks in seven basins in Nigeria are stagnant.

Though the Federal government has set a 2020 target to raise its crude oil reserves to 40 billion barrels, the 211 oil blocks have not been allocated to oil companies for exploration and production.

New Telegraph learnt that 2008 was the last time oil licensing rounds took place.

Petroleum industry experts had unanimously declared that the target could not be achieved with no oil bid rounds less than eight months before the deadline.

A former President of the International Association for Energy Economics, Prof Wumi Iledare and the convener of Vision2020 youth empowerment initiative, Dr. Ibilola Amai, had noted that exploration was critical to increasing the nation’s oil and gas reserves.

“Many other countries are extending efforts to ramp up their oil and gas production and reserves,” Amao said.

Data from the Department of Petroleum Resources (DPR) show that 179 blocks were allocated since December 2017, comprising 111 Oil Mining Leases and 68 Oil Prospecting Licences.

Nigeria has seven basins, namely Anambra, Benin, Benue, Bida, Chad, Niger Delta and Sokoto.

In Anambra, 12 out of 19 blocks have not been allocated; in Benin, 39 out of 50 are open; in Benue, 41 out of 43 are still idle, while none of the 17 blocks in Bida has been allocated.

In Chad basin, 40 out of 46 blocks are open; in the oil-rich Niger Delta, 34 out of 187 blocks are still idle, while Sokoto’s 28 blocks remain unalloted.

“You cannot explore if the right to prospect is not granted and you cannot grant unless there is a bidding process and you cannot bid if the environment is not conducive,” Professor Wumi Iledare said.

Meanwhile, Royal Dutch super major, Shell, has taken Final Investment Decisions on three major projects in Nigeria in 2018.

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The company, which reported this in its Annual Report, added that the FIDs were taken on Assa North, Gbaran Enwhe and Gbaran Nodal Compression projects (Shell interest 30 per cent).

The company also mentioned progress in the BSWAP project.

“In February 2019, we agreed the heads of terms for the resolution of the OML 118 negotiations, including the PSC dispute with the Nigerian National Petroleum Corporation (NNPC), following which we have a clear commercial framework for a potential Bonga South West Aparo FID, and announced an invitation to tender,” the company stated.