Victor Ezeja
In a bid to scale up crude oil production, the Nigeria National Petroleum Company Limited (NNPCL) says it has declared a state of emergency in the oil and gas industry.
NNPCL Group Chief Executive Officer, Mele Kyari, disclosed this in a keynote address at the opening of the 23rd edition of the Nigeria Oil and Gas Conference and Exhibition Week in Abuja, on Tuesday.
Join our WhatsApp ChannelKyari lamented about the consistent decline in crude oil production in the country as reflected in the monthly data released by both the Organisation of Petroleum Exporting Countries (OPEC), and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
He said: “We have decided to stop the debate. We have declared war on the challenges affecting our crude oil production. War means war. We have the right tools. We know what to fight. We know what we have to do at the level of assets. We have engaged our partners. And we will work together to improve the situation.”
The NNPCL GCEO said a thorough asset study had shown that Nigeria can easily produce two million barrels of crude oil per day without deploying new rigs. He, however, pointed out that the greatest obstacle to accomplishing that is the failure of players to take prompt action.
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He went on to say that the drastic action will assist the national oil company and its partners in swiftly removing any barriers to efficient production that have been discovered, such as the problem of procurement process delays in the industry.
As observed by analysts, Nigeria has for some years now, not been able to increase its crude oil production and meet OPEC quota due to theft, vandalisation of oil facilities causing leakages, and obsolete infrastructure among others.
As shared in the NNPC’s Energy and You programme aired on NTA, the National oil company through collaboration with security agencies, and private security companies, recorded a total of 256 incidents of oil theft in several locations across the Niger Delta region between 22nd and 28th of June 2024. These included illegal refineries discovered and destroyed, illegal pipeline connections, sacks of stolen crude and tanks for storage of crude uncovered. NNPCL said it will not relent on the war on crude oil theft until the menace is eradicated.
Latest OPEC data showed that Nigeria’s crude oil production dropped to 1.25 million barrels per day in May 2024. This is about a 2.34 per cent decline from 1.28 million bpd recorded in April.
In the 2024 budget, Nigeria set a crude oil production benchmark of 1.78 million bpd and projected crude benchmark price of $77.96 per barrel.
As part of measures to increase production, NNPCL, according to Kyari, would replace all outdated crude oil pipelines that were constructed more than 40 years ago. He added that the national oil company would also launch a rig sharing programme with its partners to guarantee that production rigs remain in the country for the four to five years that is typical in most other countries.
He urged everyone in the industry to work together towards bringing down the cost of production and increasing output to desired levels.
Victor Ezeja is a passionate journalist with seven years of experience writing on economy, politics and energy. He holds a Master's degree in Mass Communication.
