The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has said the country’s known hydrocarbon reserves have increased, with crude oil and condensate hitting 37.5 billion barrels as of January 1.
Associated and non-associated gas stood at 209.26 trillion cubic feet (Tcf) as of the start of 2024, NUPRC chief executive Engr Gbenga Komolafe told a briefing in Abuja, according to a press release by the commission Tuesday.
Of the liquid reserves, petroleum totaled 31.56 billion barrels while condensate stood at 5.94 billion barrels.
Of the gas reserves, associated volumes were 102.59 Tcf while non-associated gas stood at 106.67 Tcf.
“[T]hese figures shed light on the significant resources Nigeria possesses in terms of Oil and Gas reserves, reaffirming its position as a key player in the global energy landscape, which is crucial for the country’s energy policies, investment decisions, and overall economic planning”, the news release stated, attributing the statement to Komolafe.
Over $50 Billion Projects
Last year the Nigerian Content Development and Monitoring Board (NCDMB) said the West African nation has set an aim of over $50 billion worth of oil development projects in the next few years.
“Some of the opportunities are from the indigenous players, some by NNPC Ltd and the international oil companies”, then-NCDMB Executive Secretary Simbi Kesiye Wabote told the Nigerian Oil and Gas Opportunity Fair in May 2023, as quoted in a news release by the board.
“If you put them together, in the next five years they would exceed $50 billion that would be invested in the Nigerian oil and gas industry”.
Sustained Profitability
Nigeria is now in a position for sustained profitability in its fossil fuel industry, according to the Nigerian National Petroleum Co. Ltd. (NNPC).
NNPC recently reported NGN 2.5 trillion ($2.2 billion) in income for the 16-month period to December 2022, saying policy reforms have turned around the country’s oil fortunes after decades of losses by the national oil and gas company.
NNPC collected NGN 8.8 trillion ($7.7 billion) in revenue for the period, while it owed NGN 344 billion ($301.6 million) in income tax, according to a financial report on its website.
The report said 2023 presented a “pivotal chapter”, hailing the end of a costly fuel subsidy program last year as setting the stage for sustained profitability. In his inaugural address May 2023, President Bola Ahmed Tinubu announced the end of the country’s fuel subsidy as part of efforts to lighten the government’s financial burdens.
NNPC said separately in an earlier report on its YouTube channel reviewing 2023, “Freed from the bureaucratic entanglements by the implementation of the Petroleum Industry Act it [NNPC] embarked on a journey of financial prosperity”. Adopted 2021 to replace the Petroleum Act, the new legislation provides for energy infrastructure financing support, a simplified hydrocarbon tax and energy investment promotion.
“The foundations for this success lay in sound policies, a streamlined cost structure and the infusion of automation into financial processes”, NNPC said in the video report. “This combination of factors fostered operational efficiency, cost containment and optimization, paving the way for unprecedented profitability from the depth of a staggering loss of NGN 800 billion [$701.4 million] in 2018 to a NGN-1.7 billion [$1.5 million] setback in 2019”.
It was in 2020 that the company became profitable for the first time since its establishment in 1977, according to NNPC.
“The lingering constraint of fuel subsidy payments hampered its growth potential until a new administration emerged bringing an end to the subsidy regime, saving the company from bankruptcy and setting it on a path of financial prosperity”, NNPC added in the video report.
The subsidy removal has saved the state NGN 400 billion ($350.7 million) monthly on average, according to chief financial officer Umar Ajiya. “[T]he totality of the entitlements of tax and royalties and profits… were all going into subsidy and that’s why we reached a position in 2022 [where] we literally remitted zero to the federation account”, Ajiya said in the video report.
After the new head of state’s decision to stop subsidy payments, NNPC managed to start paying dividends to the state, Ajiya said, adding, “On top of that we are also paying our due obligations in terms of taxes and royalties and all other government tax”.
NNPC contributed NGN 4.5 trillion ($3.9 billion) to state coffers in the first nine months of 2023, according to the video report.
Source: by Jov Onsat for Rigzone Staff