Nigeria will use up oil reserves in 50 years – World Bank

Nigeria’s crude oil reserves will be exhausted in 50 years’ time if production continues at the current rate, the World Bank has said in a new report. 

Petroleum remains sub-Saharan Africa’s most valuable asset, according to the report titled ‘Africa’s Resource Future’.

It says oil has accounted for more than 30 percent of total wealth in Sub-Saharan African resource-rich countries, including Chad, the Republic of Congo, and Gabon. “However, this is still significantly less than in some resource-rich comparators outside Africa, where average oil wealth can exceed 50 percent.” 

According to the report, there are both major producers, which are defined as those that produce an average of more than 100 barrels per day, and minor producers, which are defined as those that average less than 100 barrels per day. 

“Before the boom period there were 14 petroleum-producing countries (7 major and 7 minor producers). After the boom period, the number of petroleum producers increased to 22 (10 major and 12 minor producers),” it says.

The report, however, says the volume of discoveries in many of these countries since 2010, with the exception of Mozambique, has been disappointing, and the reserve-to- production ratio of all known reserves was less than expected. 

“For instance, the ratio is about 50 years in Nigeria at the current production rate (and about 20 years for Angola, the other major oil producer in the region), whereas it is estimated to be more than 100 years in many of the major oil producers in the Middle East,” it adds.

Refining capacity remains a continental challenge, according to the report.

It says, “One question that carbon-rich countries are debating is whether they should be expanding refining capacity. In 2020, Angola exported crude oil worth $17.7 billion, making it the 13th largest oil exporter globally. It exported $12.1 billion to China, $1.2 billion to India, and $1.1 billion to Thailand. 

“Crude petroleum and petroleum gas are Nigeria’s top exports, accounting for 84 percent of total exports at $30 billion and $5.9 billion, respectively. Both countries then import refined petroleum.”