Economy

Nigeria May Not Have Crude Oil in Next 50 Years, DPR Says

Published

6 years ago

23/02/2020

By Adedapo Adesanya

The Department of Petroleum Resources (DPR) has disclosed that Nigeria’s crude oil deposit could be exhausted in five decades from now.

This was contained in its latest Nigerian Oil and Gas Industry Annual Report, which noted that at current reserve depletion rate standing at 2.04 percent per annum, will cease in 2067.

The DPR then warned that this may be brought forward if oil is exploited at a greater rate as Nigeria may resort to a bigger oil production if its volatile economy faces a large scale crisis that upsets its current balance.

“The nation’s depletion rate and life index are 2.04 percent and 49.03 years respectively. These parameters lie within the long-term range.

“However, to achieve the aspiration of the Federal government of 4MMBOPD daily production and reserves of 40MMMB, there is the need for corresponding increase in reserves as production is increases, otherwise, the life index will fall from a sustainable long-term threshold to a less futuristic and sustainable medium to short term range,“ the document said.

The report further disclosed that the nation’s oil and condensate reserves was shared across various contract types namely Joint Venture, Production Sharing Contract, Sole Risk and Marginal Field.

Of this four, the Joint Venture, which is constituted by international oil exploration companies such as Mobil, Chevron and Total, is the highest production rate of nearly 41.64 percent. Interestingly, it has a low depletion rate in the neighbourhood of 1.8 percent and a high life index of 56.34 years.

The Production Sharing Contract, making up 36.08 percent of Nigeria’s total oil output, has the lowest life index of 32.15 years and the highest depletion rate currently 3.10 percent. This means that it poses the biggest threat to Nigeria’s oil future at its current production rate.

The Sole Risk, presently responsible for 20.14 percent of the national production, maintains the lowest depletion rate of 1.5 percent at the same time the highest life index of 65.49 years.

On its part, the Marginal Field contributes 2.14 percent to the nation’s production basket at a 2.7 percent depletion rate while maintaining a life index of 36.83 per cent.

Beyond the challenge that the depletion has on Nigeria’s revenue, it was revealed that oil will continue to face less demand as developed and emerging economies warm up for a large-scale migration from gasoline-powered cars to electric cars, shrinking need to buy the nation’s crude oil from some of Nigeria’s oil partners like the US, India, Brazil, Spain, France, and the Netherlands.

Currently, as the world move to alternative energy, patronage for electric cars is rising spurred in part by the massive campaign for the invention in the Western world and this means no large demand for oil.

Apart from the peerless benefit of offering renewable energy, electric cars easily promote the global massive campaign for environmental friendly initiatives and do not emit carbon which affects the environment.

Oil prices are also affected due to its volatility which faced a free-fall lately with Brent Crude (the international benchmark for Nigeria’s Bonny Light) tumbling from $70 per barrel to $57 a barrel since the year began following the spread of the coronavirus in China, one of Nigeria’s crude destinations.

Economy

Tinubu Presents N58.47trn Budget for 2026 to National Assembly

Published

17 hours ago

19/12/2025

Adedapo Adesanya

By Adedapo Adesanya

President Bola Tinubu on Friday presented a budget proposal of N58.47 trillion for the 2026 fiscal year titled Budget of Consolidation, Renewed Resilience and Shared Prosperity to a joint session of the National Assembly, with capital recurrent (non‑debt) expenditure standing at 15.25 trillion, and the capital expenditure at N26.08 trillion, while the crude oil benchmark was pegged at $64.85 per barrel.

Business Post reports that the Brent crude grade currently trades around $60 per barrel. It is also expected to trade at that level or lower next year over worries about oil glut.

At the budget presentation today, Mr Tinubu said the expected total revenue for the year is N34.33 trillion, and the proposal is anchored on a crude oil production of 1.84 million barrels per day, and an exchange rate of N1,400 to the US Dollar.

In terms of sectoral allocation, defence and security took the lion’s share with N5.41 trillion, followed by infrastructure at N3.56 trillion, education received N3.52 trillion, while health received N2.48 trillion.

Addressing the lawmakers, the President described the budget proposal as not “just accounting lines”.

“They are a statement of national priorities,” the president told the gathering. “We remain firmly committed to fiscal sustainability, debt transparency, and value‑for‑money spending.”

The presentation came at a time of heightened insecurity in parts of the country, with mass abductions and other crimes making headlines.

Outlining his government’s plan to address the challenge, President Tinubu reminded the gathering that security “remains the foundation of development”.

He said some of the measures in place to tame insecurity include the modernisation of the Armed Forces, intelligence‑driven policing and joint operations, border security, and technology‑enabled surveillance and community‑based peacebuilding and conflict prevention.

“We will invest in security with clear accountability for outcomes—because security spending must deliver security results,” the president said.

“To secure our country, our priority will remain on increasing the fighting capability of our armed forces and other security agencies by boosting personnel and procuring cutting-edge platforms and other hardware,” he added.

Economy

PenCom Extends Deadline for Pension Recapitalisation to June 2027

Published

1 day ago

19/12/2025

Aduragbemi Omiyale

By Aduragbemi Omiyale

The deadline for the recapitalisation of the Nigerian pension industry has been extended by six months to June 2027 from December 2026.

This extension was approved by the National Pension Commission (PenCom), the agency, which regulates the sector in the country.

Addressing newsmen on Thursday in Lagos, the Director-General of PenCom, Ms Omolola Oloworaran, explained that the shift in deadline was to give operators more time to boost the capital base, dismissing speculations that the exercise had been suspended.

“The recapitalisation has not been suspended. We have communicated the requirements to the Pension Fund Administrators (PFAs), and we expect every operator to be compliant by June 2027. Anyone who is not compliant by then will lose their licence,” Ms Oloworaran told journalists.

She added that, “From a regulatory standpoint, our major challenge is ensuring compliance. We are working with ICPC, labour and the TUC to ensure employers remit pension contributions for their employees.”

The DG noted that engagements with industry operators indicated broad acceptance of the policy, with many PFAs already taking steps to raise additional capital or explore mergers and acquisitions.

“You may see some mergers and acquisitions in the industry, but what is clear is that the recapitalisation exercise is on track and the industry agrees with us,” she stated.

PenCom wants the PFAs to increase their capital base and has created three categories, with the first consists operators with Assets Under Management of N500 billion and above. They are expected to have a minimum capital of N20 billion and one per cent of AUM above N500 billion.

The second category has PFAs with AUM below N500 billion, which must have at least N20 billion as capital base.

The last segment comprises special-purpose PFAs such as NPF Pensions Limited, whose minimum capital was pegged at N30 billion, and the Nigerian University Pension Management Company Limited, whose minimum capital was fixed at N20 billion.

Economy

Three Securities Sink NASD Exchange by 0.68%

Published

1 day ago

19/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Three securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Thursday, December 18.

According to data, Central Securities Clearing System (CSCS) Plc led the losers’ group after it slipped by N2.87 to N36.78 per share from N39.65 per share, Golden Capital Plc depreciated by 77 Kobo to end at N6.98 per unit versus the previous day’s N7.77 per unit, and FrieslandCampina Wamco Nigeria Plc dropped 19 Kobo to sell at N60.00 per share versus Wednesday’s closing price of N60.19 per share.

At the close of business, the market capitalisation lost N16.81 billion to finish at N2.147 billion compared with the preceding session’s N2.164 trillion, and the NASD Unlisted Security Index (NSI) declined by 24.76 points to 3,589.88 points from 3,614.64 points.

Yesterday, the volume of securities bought and sold increased by 49.3 per cent to 30.5 million units from 20.4 million units, the value of securities surged by 211.8 per cent to N225.1 million from N72.2 million, and the number of deals jumped by 33.3 per cent to 28 deals from 21 deals.

Infrastructure Credit Guarantee Company (InfraCredit) Plc remained the most traded stock by value with a year-to-date sale of 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.

Similarly, InfraCredit Plc ended as the most traded stock by volume on a year-to-date basis with 5.8 billion units traded for N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units exchanged for N524.9 million.