The nation’s crude oil reserves of 37 billion barrels, two per cent of which is being produced annually, will be depleted in 49 years, according to the Department of Petroleum Resources.
The reserves, which stood at 37.45 billion barrels in 2014, fell to 37.06 billion barrels in 2015 and 36.74 billion barrels in 2016. It, however, rose to 36.97 billion barrels in 2017 and 37 billion barrels in 2018, the DPR data showed.
“The nation’s depletion rate and life index are 2.04 per cent and 49.03 years respectively,” the regulator said.
The reserves depletion rate is a measure of 2018 total oil and condensate production divided by the reserves as of January 1, 2019, according to the DPR.
It said, “This indicator gives a bird’s eye on an annual basis, what percentage proportion of the quoted reserves was produced.
“The life index, on the other hand, is a measure of the reserves as of January 1, 2019, divided by the total production in 2018. This parameter highlights how long (in years) quoted reserves volumes will be available for production.”
The DPR said to achieve the government’s aspiration of four million barrels per day production and reserves of 40 billion barrels, “there is a need for corresponding increase in reserves as production increases.”
He noted that if that was not done, “the life index will fall from a sustainable long-term threshold to a less futuristic and sustainable medium to short-term range.”
The nation’s oil and gas production structure is majorly split between Joint Ventures onshore and in shallow water with foreign and local companies, and the Production Sharing Contracts in deepwater offshore, to which most of the international oil companies have shifted their focus in recent years.
The JV operators, despite having the highest production (about 41.64 per cent) among all the contract types, recorded a low depletion rate of about 1.8 per cent and high life index of 56.34 years, according to the DPR.
It said the PSC companies had the highest depletion rate of 3.10 per cent and the lowest life index of 32.15 years, while accounting for about 36.08 per cent of the nation’s total production.