A report issued by Nigeria’s Department of Petroleum Resources (DRP) states the country’s crude oil reserves of thirty-seven billion barrels will be depleted in forty-nine years. The Nigerian government has been pushing for a production target of four million barrels of oil per day and reserves of forty billion barrels. The DPR’s report noted that meeting this target will require coinciding increases in reserves as production elevates.
As of January 1, 2019, Nigeria’s reserves replacement ratio (RRR), which measures contributions to oil reserves relative to total production, stood at 4 percent. Although a positive number, the DPR expressed worry over such a small ratio. An ideal RRR would be 100 percent, where reserves are replaced at an equal rate as production. Percentages above 100 percent are more desirable, as it means more oil is being placed into reserves than produced, helping to avoid shortages and absorb shocks from price fluctuations on the international market.
Early last week, Chief Timipre Sylva, the minister of state for petroleum resources, raised concern about Nigeria’s petroleum industry, saying the oil sector had worsened as corruption and the uncertain fiscal environment deterred foreign investment needed to boost production and increase reserves. He warned that Nigeria would have to leave most of its oil reserves in the ground if they were not explored and exploited before the world moves away from fossil fuels.