The Nigerian National Petroleum Company Limited (NNPCL) has declared a state of emergency on the production of oil and gas in Nigeria and further called for collaboration between stakeholders in the sector.
The Group Chief Executive Officer of NNPCL, Engr. Mele Kyari, disclosed this in a keynote address at the opening ceremony of the 23rd edition of the Nigeria Oil & Gas Conference and Exhibition (NOG Energy Week) in Abuja, on Tuesday.
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Kyari reiterated in the press release issued by the NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, that the NNPC was waging war on challenges facing the crude oil sector to improve production situations.
“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,” he declared.
According to Kyari, a detailed analysis of assets revealed that Nigeria can conveniently produce two million barrels of crude oil per day without deploying new rigs, but the major impediment to achieving that remains the inability of players to act promptly.
He emphasised that the “war” will help NNPC and its partners to speedily clear all identified obstacles to effective and efficient production such as delays in procurement processes, which have become a challenge in the industry.
On medium to long-term measures aimed at boosting and sustaining production, Kyari said NNPC would replace all the old crude oil pipelines built over four decades ago and also introduce a rig-sharing programme with its partners to ensure that production rigs stay in the country for between four and five years which is the standard practice in most climes.
He urged all players in the industry to collaborate towards reducing the cost of production and boosting production to target levels.
Kyari stressed the oil company’s commitment to investing in critical midstream gas infrastructure such as the Obiafu-Obrikom-Oben (OB3) and the Ajaokuta-Kaduna-Kano (AKK) gas pipelines to boost domestic gas production and supply for power generation, industrial development and economic prosperity of the country.
On Compressed Natural Gas (CNG), Kyari observed that NNPC has since keyed into the Presidential CNG drive, adding that in conjunction with partners such as NIPCO Gas, NNPC Ltd has built several CNG stations, 12 of which will be commissioned on Thursday in Lagos and Abuja.
Nigeria has struggled to meet its crude oil production targets in the first five months of 2024. Despite aiming for 1.78 million barrels per day, OPEC+ set a lower quota of 1.5 million barrels per day in December, falling short by 288,000 barrels.
In January, Nigeria’s average production was 1.42 million barrels per day, below both the Organization of Petroleum Exporting Countries (OPEC) quota and the budget target.
Production further dropped to 1.32 million barrels in February and 1.23 million barrels in March.
Throughout the first quarter, Nigeria consistently failed to reach the OPEC+ quota and the 2024 budget target, averaging only 1.4 million barrels per day.