Oil group strikes huge oil reserves in offshore Nigeria

US oil and gas group ExxonMobil says it has discovered up to one billion barrels of oil in an offshore field in Nigeria, signalling a boost to the country's crude reserves.

The company said in a statement on its website on Thursday that the Owowo field had "a potential recoverable resource of between 500 million and one billion barrels of oil."

Stephen Greenlee, president of ExxonMobil Exploration Company, welcomed the development, saying the company "will work with our partners and the government on future development plans."

The Owowo field, which lies about 62 miles (100 kilometres) southeast of Bonny oil terminal in the Niger Delta, is expected to boost Nigeria's efforts to raise oil reserves from 36 billion barrels to 40 billion barrels in the coming years.

The original target of hitting 40 billion barrels in 2010 could not be met due to a lack of new investment in exploration.

The delay in the passage of a key Petroleum Industry Bill (PIB) eight years after it was sent to parliament has stalled new investments in Nigeria's oil and gas sector as oil majors are wary about the direction of the industry.

Oil majors have also been divesting from the country's downstream operations -- marketing and the retail market.

Last week, ExxonMobil agreed to sell its 60-percent stake in its Nigerian marketing and retail arm to Nipco Investments, a local firm.

The two companies have signed an agreement for the deal, which is subject to regulatory approvals.

Nigeria, which depends on oil sales for 70 percent of its government revenue, is struggling to fight its way out of a recession as a result of the globally low price of crude and renewed unrest in the Niger delta since the start of the year.