July 13, 2024

NNPCL seeks stakeholders’ support to unlock 700,000bpd of deferred crude oil production  

Samuel Agbelusi
The Nigerian National Petroleum Company Ltd(NNPCL) has pleaded for a strong working relationship with oil-producing communities and other stakeholders to end Nigeria’s crude oil production losses due to production and terminal shut-ins of about 700,000 barrels per day.Mr. Mele Kyari, Group Chief Executive Officer(GCEO) NNPC Ltd, made this in a speech he delivered at the 5th National Council on Niger-Delta which had as it’s the theme, “Harnessing 21st-century development initiatives and strategies for greater impacts in the Niger-Delta region.”

Engr. Adokiye Tombomieye, NNPC Ltd Group Executive Director, Upstream, who represented the NNPCL GCEO, during the event which was organised by the Ministry of Niger Delta Affairs, appealed for the robust partnership of all the stakeholders in the Niger Delta region in initiating a sustainable programme that would curb the menace of crude oil theft and pipeline vandalism in the country.

EnergyDay gathered that operations in all the major producing wells, flow stations and terminals across the country including Bonny Terminal Network,  QUA IBOE terminal, Forcados Terminal Network, and Brass Terminal Network have been shut in and deferred due to a crisis associated with vandalism, depreciating upstream infrastructure and sabotage.
This has accounted for huge losses and limited the country’s capacity to benefit from rising international crude oil prices.
Kyari, however, noted that it is willing to work with all stakeholders in the sector to enable the Corporation conduct its operations without interruption or vandalism.

According to him, this working relationship would ensure that crude oil is safely explored, produced, and sold in a conducive atmosphere.

He said, “ Nearly 700,000 barrels per day of deferred crude oil production are not generating any revenue for the country at the present time. At the current average crude oil price of $100 per barrel, the 700,000 barrels per day translates to a daily loss of $70m.

“To fund any project and fulfill our obligations to the Niger Delta Communities, we must be able to conduct our operations without interruption or vandalism/sabotage, safely explore, produce, and sell hydrocarbons.

“However, nearly 700,000 barrels per day of deferred crude oil production are not generating any revenue for the country at the present time.

“The requirements of the Host Community Trust Fund are also clear; if any of our assets are damaged, the cost of repairs will be deducted directly from the fund.

“In our effort to eliminate the recurring problem of vandalism on our pipelines and vulnerable assets in the Niger Delta, we recently launched a new Hydrocarbon Infrastructure Security Architecture.

“The security architecture recognizes the important role of the host communities. Considering this, all contracts for private security were awarded to local companies after consulting with community leaders.

“We recognize and value the fact that they are patriotic, understand the pulse of the community, and desire the best for the Niger Delta and the nation.

” I am aware that the current Administration is determined to address all issues in this region and build a peaceful and prosperous Niger Delta, with emphasis on job creation for our teeming unemployed youths, investment in infrastructure, energy, and promotion of sustainable livelihood through agricultural diversification strategy,” the NNPCL GCEO said.

He also noted that the provisions of the Petroleum Industry Act (PIA) have placed huge responsibilities on the Host Communities in terms of safeguarding the nation’s crude oil assets.

According to him, the provisions of the new petroleum industry act ensure that the host communities receive direct social and economic benefits from petroleum operations.

He said, “The Act established the Host Community Trust Fund, which, for the first time in Nigeria, provides a legal framework for the Nigerian Oil and Gas Corporate Social Responsibility (CSR), with three percent of the previous year’s Operating Expenditures designated for the development of the Host Communities.

The Trust Fund is administered by residents of the host communities who will serve on the board of trustees, management committees, and advisory groups.

The Host Community Trust Fund will also provide communities control over the development of their territories without external interference.