March 1, 2024

Nigeria’s crude oil output in January sets to hit 1.8mbpd, as NNPCL GCEO makes ambitious projection

Oredola Adeola

The Nigerian Government has set an ambitious plan to achieve 1.8 million barrels per day(mbpd) of crude oil production plus condensate volume in January 2023, with a target of attaining 2.2 mbpd before the end of 2023.

Mele Kyari, the Group Chief Executive Officer of NNPC made this known in a virtual interview while speaking on the topic: Outlook for Africa/Nigeria’s Oil & Gas Sector in 2023?, at the 13th Global UAE Energy Forum PANEL: Europe Session, organised by Gulf Intelligence, a strategic consulting group in the Middle East focused on the international energy & natural resources industry on Wednesday.

According to him, as of the end of December 2022, the country’s production level was 1.519mpd, not too far from 1.8mbpd.

The NNPCL GCEO said, “I have a number of projects with a clear line of sight coming on board in 2023, including restoration work on some of our pipelines.

“This programme will clearly make the attainment of 1.8mpd, a very easy one. We are looking beyond that, there are plans on the way to escalate that figure further.

Kyari attributed the recovery made in the country’s crude oil output to NNPCL’s collaboration with the local communities and other stakeholders aimed at reducing product theft and pipeline vandalism.

He revealed that the spate of insecurity and attack on oil installations across the Niger Delta became very manifest in early 2022, as the oil output level suffered the biggest decline in history when it dropped to 1,158,274bpd, 1,083,899bpd, 972,394bpd, and 937,766bpd for June, July, August, and September 2022 respectively.

He further noted that the country has made a significant gain with the award of pipeline security and management to Tantita security service Nigeria Ltd, a security outfit linked to Chief Government Ekpemupolo, alias Tompolo in February 2022.

Kyari said, “For us, we see a trajectory of restoring production to hitting the target of 2.2 mbpd within 2023. We have the capacity to surpass the country’s budget output target of 1.8mpd. This is a moving target that is achievable.”

Speaking about the transition of NNPC to a corporation in 2022 in compliance with the provision of the Petroleum Industry Act(PIA)2021, the GCEO said, “NNPC transition to a commercial entity has made a difference. NNPCL is a private company owned by the government, operating like other private oil and gas exploration companies. Our relationship today with the Government is strictly commercial.

“There is a service level agreement between the Corporation and the Federal Government in the area of supply of petrol to the marketers, selling at a price that supports the midstream and downstream policy.

“Our relationship with the Government in terms of fuel supply is commercial. There is a service level agreement between us to supply fuel and sell at the price that the policy decision of the government stipulates. It is not a problem for us as a corporate entity,” Kyari said.

Reacting to a question on petrol subsidy, Kyari said that the Nigerian Government determines what and how the subsidy is paid.

He added that subsidy of PMS is always a government policy decision all over the world, justifying it with all forms of subsidy across the world, he said Nigeria has direct intervention in PMS subsidy.

He said, “The decision of whether the subsidy will remain or stay, will clearly be decided by the Government.

In terms of product availability in the domestic market, Kyari said that when the country’s four refineries begin production in the middle of the year, the combined national crude oil supply capacity will be around 1.1 million barrels per day.

He said that the domestic market obligations will not take away crude exports to the international market.

Kyari added that despite the 1.1 mbpd domestic market demand, there will be a net difference that will have to be exported since Nigeria would have hit a production output of over 2mbpd