Report forecasts oil depletion in 10 years
•Nigeria's gas project receives UN support
By Alike Ejiofor with agency report, 10.09.2009

Friday, October 9, 2009

A new report authored by the United Kingdom Energy Research Centre (UKERC) has painted a gloomy picture on the future availability of conventional oil, which could have severe economic impact across the world.





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Also, Nigeria's gas utilisation project at the Ovade-Ogharafe oil field in Delta State has been successfully registered under the United Nations Clean Development Mechanism (CDM) of the Kyoto Protocol, boosting Federal Government's efforts to reduce gas flaring and improve utilisation.

The report entitled “Global Oil Depletion: An Assessment of the Evidence for a near-term Peak in Global Oil Produc-tion”, found that conventional oil may peak before 2030.

But it also argues that there's a “significant risk” that the much sought after natural resource might peak before 2020.

“A peak in conventional oil production before 2030 appears likely and there is a significant risk of a peak before 2020. Given the lead times required to both develop substitute fuels and improve energy efficiency, this risk needs to be given serious consideration,” UKERC said.

It was discovered that the world may be entering a difficult phase characterised by slow and expensive oil. In other words, even the discovery of new oil fields is fraught with the problem of slow and high cost of extraction.

The situation might be compounded by difficulty in making such discoveries in the first place, the report said.

"The rate of decline of production is accelerating. More than two thirds of existing capacity may need to be replaced by 2030 solely to prevent production from falling.

"While large resources of conventional oil may be available, these are unlikely to be accessed quickly and may make little difference to the timing of the global peak," the report argued.

But experts have debated the accuracy of reports that are precise about oil depletion. While some argue global oil producing is falling drastically, others insist there is enough to meet 21st century global demand.

Mr. Steve Sorell was quoted by Science Daily as saying that "tt makes no sense to provide precise forecasts of when a peak in oil production will occur. The data is unreliable, there are multiple factors to consider and a ‘bumpy plateau' seems more likely than a sharp peak. But we can say that the window is narrowing rapidly. The effects of global oil depletion will depend greatly on the response from governments and on the scale of investment in new energy technologies."

Meanwhile, the CDM of the Kyoto Protocol, where Nigeria's gas project was registered is working towards green house gas emission reduction from projects in developing countries. These projects are registered and monitored under the UN so that these reductions can be sold to developed countries that have emission limits.

The Ovade-Ogharafe project, which is an initiative of the Nigerian National Petroleum Corporation (NNPC) and Pan Ocean Oil, is designed to reduce green house gas emission by more than two million tonnes of carbon dioxide yearly.

Chairman of Pan Ocean Oil Corporation, operators of the project, Chief Festus Fadeyi, said in a statement yesterday that the project was the largest CDM project in Africa and would provide 135 million standard cubic feet per day for electricity at full capacity.

He said that the gas which otherwise would have been flared will be sold to developed countries to generate revenue for the country.

“The CDM registration has taken more than four years of efforts that were led by Carbon Limits of Norway. The credits will be sold to NUON, the Dutch state utility, so that the carbon emissions reductions that occur in Nigeria will help the Netherlands meet its obligation under the Kyoto Protocol,’’ he said.

Fadeyi explained that the project had important local environmental benefits such as reduced emission of dangerous gases like Nitrogen Oxides, and Volatile Organic Compounds (VOCs).

He noted that this would improve the working conditions of the employees and the living standards of the nearby community.

Nigeria is among the top 20 countries in the world that flare gas. Others are Russia, Iran, Iraq, Angola, Qatar, Algeria, Venezuela, Equatorial Guinea, Indonesia, Azerbaijan, Kazakhstan, Libya, Brazil, Mexico, the United States, Canada and the UK.

Nigeria flares more gas than any other country except Russia, as the country burns 2.5 billion cubic feet of gas per day, losing $2.5 billion yearly due to lack of infrastructure to harness it.

The country was among over 160 nations that met in Kyoto, Japan, from December 1 to 11 1997, to negotiate binding limitations on emission of gases for the developed nations, pursuant to the objectives of the UN Framework Convention on Climate Change of 1992.

The outcome of the meeting was the Kyoto Protocol, which came into force in February 2005. The developed nations agreed to limit their greenhouse gas emissions, relative to the levels emitted in 1990. The countries agreed to reduce emissions from 1990 levels by 6 per cent during the period 2008 to 2012.

There is so much undiscovered oil all over Africa (including Nigeria), this is just bs propaganda. Right as we speak there is a joint exploration occurring in the lake Chad basin, I believe that's where most oil in Nigeria lies.

The lake chad oil can be the deciding factor in the country splitting

I agree.

10 years is too long.

I'm praying for 5 years maximum.

let the oil finish.

I am praying for the oil to finish next year. tpia, your prayer is too far.

@ poster, from geological point of view, it is very wrong for whoever is making the assumption of depletion of oil without regard to aquired seismic data and interpretation at hand, especially in the Niger Delta where marginal fields alone worth producing 1.3tbd. Reports, i think should be based on scientific and proven fact rather than on assumptions

@others, get ready for a more unified Nigeria.

blackspade:

There is so much undiscovered oil all over Africa (including Nigeria), this is just bs propaganda. Right as we speak there is a joint exploration occurring in the lake Chad basin, I believe that's where most oil in Nigeria lies.

At the risk of sounding pessimistic, what makes us think that if a sizeable and commercial quantity of oil is found in Lake Chad basin, the northerners would 'allow us to share'? That is when they will change the constitution and true federalism will now be enacted. Esp if the resource is beginning to dwindle in the south/east

However, i dont understand why these foreign bodies keep predicting doom for Nigeria. First it was the US that said that Nigeria will be no more by 2015 or so and now UK is giving their own opinion. I am waiting for France, Germany and China to give their own quotes too!

I wish the oil will finish tomorrow, cos before they found it, the Nigerian people were 'rich'. Now, only a few are rich, and they completely ignore our other resources.
But that report is wrong. Last year, they said in 30yrs the oil wells will be dry, this year its 10yrs they say. Next year now they'l come with another propaganda, maybe they'l say 12 yrs.
Prehistoric sealife (sea elephants and seals) and aged vegetation died away and their debris formed oil. Imagine what quantity we're talking about. The oil will not finish.
We will have to learn to use it for the reason we were given it in the first place. After all, isnt the Golf and the UAE living on the same oil. They are disciplined enough to use it to enrich themselves and not as a curse.
We have to learn that. Theres no easy way out.

The title of the report sensationalizes the body, however that should not take away the contents which seems a little bit academic even if it has its faults. The content truly deals with a lot of various economic and geologic factors in fossil fuel especially oil. First of all peak oil means that at a certain point in time oil production will start a downward sloping curve in terms of supply and easy oil will be harder to find or oil production cost will rise. In terms of Nigeria this report may be true that NIgeria will peak in ten or twenty years because we have little new discoveries in the offshore and most of the discoveries there will cost higher to produce. An example, onshore discoveries of about 500 million barrels right now will cost about $500m to produce, in shallow waters about $1b and offshore about at a range of 150,000 barrels per day about $3-4b. The report as it concerns Nigeria is that the easy oil in onshore areas and shallow water will soon peak and also easily accessible oil is harder to find leaving discoveries for oil in further depths of water offshore or in the case of brazil further deeper in the water. This new discoveries are actually harder to produce and from an the economic value can only be supported at a certain price threshold higher than $40. SO even if you produce this new harder to find and produce oil discoveries the economic impact will be huge, to Nigeria it means less money for the federal government (which will control the offshore waters) and to the world it means higher oil prices most likely.