According to the Organisation of Petroleum Exporting Countries (OPEC), exploration and production (E&P) activities, which determine reserves and volume addition, have fallen significantly, as only nine active rigs operated in Nigeria last year.
The number of active rigs in Nigeria dropped from 29 in 2015 to nine in 2016 despite 59 rigs being active in 2013 and 46 in 2014. This was buoyed by militancy activities in the oil-rich Niger Delta and saw Nigeria’s crude production drop to about 800,000 barrels daily by mid-year 2016. Given its dependence on oil revenue, which accounts for over 90 percent of its foreign exchange earnings, the Nigerian Government was forced to open negotiations with stakeholder groups in the Niger Delta, to scale up production in order to meet campaign promises.
Drastic fall in revenues due to production cut back and lower oil prices at the international market experienced last year are the major reasons Nigeria is funding a significant part of its 2017 budget on external borrowings.
To underscore the decline in E&P, the National Bureau of Statistics (NBS) recorded a decline in the number of exploratory wells from the 23 in 2013 to just eight at the end of 2016.
Selected statistics from 2012 to 2016 revealed that Nigeria produced about 656.805 million barrels of crude oil in 2016 against a little over 777.492 million in 2015, with about 771.445 million barrels exported in 2015 against over 773.833 million in 2014, with reserves put at 37.452 million barrels in 2016.
According to NBS, a total of 2,711,803.10mscf of gas was produced in 2016 against 3,003,179,000mscf in 2015, while 2,404,095,858.60mscf of gas was utilised in 2016 against 2,672,247,000.00mscf a year before, and gas flared was 330,933,000.00mscf as in 2015.
The Nigeria Offshore Market Report for 2016 to 2020 expects the country’s demand to be relatively flat towards 2018, while demand from Bonga-Southwest-Aporo in 2019/2020 will somewhat increase at the very end of the period.