Lagos — Amid the controversy trailing the recent downgrade of oil and gas reserves held by Shell worldwide, the Department of Petroleum Resources (DPR) disclosed yesterday, that Nigeria's crude oil reserves remained at 34 billion barrels.
The DPR, however, said it had begun discussions with Shell Petroleum Development Comp-any (SPDC) on the latter's claim that the recategorisation of its global oil and gas reserves, affected about 1.3 billion barrels of Nigeria's total oil reserve.
Speaking to THISDAY in Lagos, the DPR's Deputy Director, Resource Manage-ment, Mr. Benjamin Ogunjana, said Nigeria's current hydrocarbon reserves include 29 billion barrels of crude and five billion barrels of condensate, to take the total to 34 billion barrels, as well as 187 trillion cubic feet of gas.
"When we say 34 billion barrels, we mean we are adding oil plus condensate," said Ogun-jana.
Shell, Nigeria's biggest oil producer, shocked the global oil industry last January when it announced that it had cut its oil reserves claims by 20 percent or 3.9 billion barrels. It further reduced the claims by 250 million barrels, citing Nigeria as one of its operating areas affected most by the exercise.
The announcement jolted the Federal Government, which saw it as a major blow to its campaign for a higher production quota from the Organisation of Petroleum Exporting Countries (OPEC).
The Federal Government had banked on the country's rising oil reserves and production levels, to demand for a higher OPEC quota.
The Shell reserve cut also coincided with visit to the country at that time by a two-member team from OPEC who came to collate data on Nigeria's oil reserves, production and refining status.
The DPR, the nation's oil industry monitors, however, maintained yesterday that the reserves claims Shell had submitted to the United States Security and Exchange Commission (SEC), did not match Nigeria's regulatory standards.
According to Ogunjana, the DPR's standard for recording oil reserves is adding the data on proven oil reserves as well as those on possible oil reserves.
"What Shell submitted to US SEC is proven (reserves), but what we take from Shell is proven and possible. So when you downgrade one category it can change to another category.
"In other words if you downgrade the proven category, the residual will go to possible category (P2)," said the DPR chief.
Ogunjana said the DPR was holding talks with Shell on the discrepancies in oil reserve figures. The two parties, he said, first met last Wednesday while another meeting has been scheduled for two weeks time.
He said that Nigeria's oil reserves grew by 6 billion barrels in the last seven years, mainly through exploration in the deep offshore in which a total of 32 wells were drilled with 27 of such wells posting successful commercial discoveries.
Meanwhile, the Federal Government has enjoined Norwegian investors to show more presence in the Nigerian oil and gas sector, through the establishment of fabrication facilities and other exploration and production infrastructure in the country.
Making the call in Lagos yesterday was DPR Director, Mr. Mac Ofurhie, while receiving a Norwegian delegation led by its Petroleum and Energy Minister, Mr. Einer Steensaes.
Ofurhie also called on the Norwegian investors to make use of local goods and services, in line with the spirit of the Memorandum of Understanding (MOU) signed between Nigeria and Norway in 2001.
He said that the Institutional Agreements between the DPR and the Norwegian Petroleum Directorate (NPD) was directly derived from the MOU, adding that the cooperation between both institutions has been focusing on the need by Nigeria to sustain a virile regulatory body "by tapping from the experience of Norway, especially as it relates to the deep offshore frontiers."
"The initiative is particularly important, now that oil and gas activities in Nigeria are significantly shifting into the relatively new frontiers of deepwater operations," Ofurhie said.
According to the DPR boss, apart from tapping from the Norwegian relatively longer experience in the offshore terrain, the collaboration could also tap from the impressive experience of Norway on gas development, as Nigeria strove to attain the objectives of gas flare-out in 2008.
He described the on-going offshore floating LNG project being sponsored by Norway's Statoil and other partners at the Nnwa Doro field as a good example of practical cooperation.