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Nigeria - Shale Oil - A Major Challenge.

Abuja has focused on Nigeria's non-conventional resources, a major challenge in view of a spectacular boom in the American production of shale oil and gas, having made the US the world's largest producer of liquid petroleum and natural gas in 2013.

Nigeria does have major deposits of shale oil and Abuja hopes to find shale gas as well. Having the world's main IOC players in non-conventional E&P present in Nigeria, Abuja is leaning on them to help find and develop such resources on a large scale.

The IOCs, however are not happy with key provisions of the long-pending Petroleum Industry Bill (PIB) - with many indigenous E&P players objecting to other provisions contained in this document. Where the IOCs are concerned, the main thrust of the PIB is resource nationalism which affect foreign investment in this country's petroleum sector in general (see below).

The popularity of shale oil to the economies of OPEC members like Nigeria has increased considerably in recent years. Shale oil will have a major effect on the global petroleum market in the coming years.

Shale oil is kerogen produced by pyrolysis or thermal dissolution. Kerogen is a rich source of gasoline and other fuels. But development of shale oil and shale gas requires advanced technology now mastered in the US. Nigeria has large shale oil deposits. But it needs to find and develop shale gas as well.

The Petroleum Reserves: Nigeria's proven reserves of conventional oil exceed 37bn barrels, up from 5bn in 1999. Abuja has said in recent years its target is to raise this to as much as 50bn barrels by 2020. But the IOCs operating in Nigeria have strong doubts about this in view of potential constrains to be caused when the PIB is passed into law without amendments taking into greater account the interests of foreign investors.

Proven reserves of conventional natural gas remain close to the 187 TCF figure given in early 2011. In late 2008, then State Minister for Petroleum Odein Ajumogobia said Nigeria had a gas resource base of over 600 TCF, apart from the 184 TCF proven at the time. The Department of Petroleum Resources (DPR), which regulates the E&P sector in Nigeria, in 2007 put the conventional gas reserves at between 185-189 TCF. The DPR now says the national target is to raise the official estimate of proven reserves of natural gas to 300 TCF and proven reserves of crude oil to 40 bn barrels as a minimum.

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Publication:APS Review Gas Market Trends
Geographic Code:6NIGR
Date:Aug 3, 2015
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