Under-Investment: Africa’s 125.8bn Crude Oil Reserves Slump by 500m Barrels in 2021

The 125.8 billion crude oil reserves owned by 17 African countries have depleted by about 500 million barrels this year to 125.3 billion, ostensibly due to under-investment in the continent’s oil and gas infrastructure in recent years.

However, Nigeria remains Africa’s highest producer as Libya has continued to face challenges with production, following the violence that in recent years rocked the country.
The data also aligns with the Organisation of Petroleum Exporting Countries (OPEC) statistics which last month indicated that Nigeria’s crude oil reserves dropped to 36.91 billion barrels in 2020, from 37.4 billion barrels in 2016, indicating a decrease of 1.4 per cent or 543 million barrels in five years.

In its recently-released 2021 Annual Statistical Bulletin (ASB), OPEC disclosed that the nation’s oil reserves fell from 37.4 billion barrels in 2017, before sliding to 36.9 million barrels in 2018.

In August this year, the Director of the now defunct Department of Petroleum Resources (DPR), Mr Sarki Auwalu, said that although the country’s reserves had slumped, the organisation intended to ramp it up to 50 billion barrels in the short to medium term.

He added that the federal government was also targeting increasing Nigeria’s proven gas reserves from the current 206.53 Trillion Cubic Feet (TCF) to 250 TCF.

The analysis showed that Angola has a reserves of 7.8 billion barrels, Sudan 5 billion, Egypt 3.3 billion, Congo Brazzaville 2.9 billion, Uganda 2.5 billion, Gabon 2 billion, Chad 1.5 billion, Equatorial Guinea 1.1 billion, while Ghana has 700 million barrels of reserves.

In addition, Tunisia has 400 million, Cameroon has 200 million, Congo Kinshasa has 200 million, Niger 200 million and Cote d’Ivoire 100 million barrels of the commodity, although it recently announced a “major” offshore oil and gas.

Compared to 2021, Africa’s cumulative oil reserves were 125.3 billion in 2019, 128 billion in 2018, 127.1 in 2017 and 127.3 billion in 2016.

But Nigeria led the export if crude oil from Africa in 2020, exporting more than 1.8 million barrels of oil per day, last year, although it has continued to struggle to meet its OPEC quota in the last couple of months.

Angola followed, with a daily export volume of roughly 1.2 million barrels. Overall, the exports of crude oil from Africa amounted to approximately 5.4 million barrels per day in the same year.

Furthermore, in 2019, Nigeria led crude oil exports in Africa, with more than 2 million barrels of oil sold on the international market every day as the sector accounted for 7 per cent of Nigeria’s Gross Domestic Product (GDP) while in Angola, the industry had an even higher contribution to the GDP, at nearly 40 per cent.

Between October and December 2020, the oil industry contributed up to 5.9 per cent to the total real GDP, a decrease of roughly three percentage points compared to the previous quarter while in the second quarter of 2021, the contribution of the oil sector to the country’s GDP reached 7.42 per cent.

In 2019, the figures showed that over 80 per cent of Nigeria’s export value was generated by the mineral fuels, oils, and distillation products’ sector, accounting for approximately $47 billion.

However, at the beginning of 2020, Nigeria’s daily oil production exceeded 2 million barrels. Afterwards, the production decreased and reached 1.14 million barrels per day during January 2021, the lowest value recorded in the last years. Overall, the lowest daily production of oil in Nigeria was recorded during the first three months of 2021.

Nigeria’s output fell by 60,000 barrels a day to 1.44 million barrels a day in October, just above the five-year low hit in August. Over a week ago, Royal Dutch Shell Plc was forced to invoke a clause suspending exports from its Bonny Oil Terminal in the country after a pipeline halt.

The country has continued to under-produce due to dilapidating and waning infrastructure resulting from under-investment in the sector over the years, leading to incessant shutdowns.

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