Trends in Nigeria Oil Resources: An Appraisal

P. S. Ola¹ and Victoria Ikimalo^2
1 FUTA, Akure, Nigeria
² IDSL, Abuja, Nigeria

This paper compares the trend in the world oil reserve and production with that of Nigeria in the last twenty years bearing in mind OPEC restrictions and fiscal regimes in Nigeria. Using time series regression model, projection was made to when Nigeria oil reserve will be 40 billion barrel the goal of this regime. The object of this analysis is to sensitize Nigeria of the inherent risks on her seemingly complacence on foreign based technology and market in the oil business and lack of enough diversification. The study reveals that Nigeria oil life expectancy (RIP ratio) consistently remains at about 32 years when that of countries like Kuwait Iraq and UAE are about 146, 120 and 133 years respectively. Among the first 18 oil producing nations of the world, Nigeria ranks 12 with a reserve of less than 3%. Statistically Nigeria share of OPEC production capacity will be about 2.439 mbd, when the oil reserve turns 40 billion in spite of her present production capacity of 3.5mbd. This paper analysis the risks involve in all these, since oil business constitutes the source of more than 80% of Nigeria revenue, and therefore suggests an inward looking arrangement for the exploration, production and utilization of Nigeria's oil.