NNPC Ltd blames procurement processes, operators for declining crude production
By our Correspondents
The Nigerian National Petroleum Company Limited (NNPC) has blamed delay in procurement and inaction of operators in the industry as contributing factors to the company’s crude oil production woes.
This is as the country has been struggling to meet its OPEC quota. In May 2024, Nigeria’s crude oil production made a record decline to 1.25 million barrels per day in May 2024 per a report by the Organisation of Petroleum Exporting Countries (OPEC).
Commenting on efforts to increase the country’s oil production, Group Chief Executive Officer of NNPC Ltd, Mr. Mele Kyari 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 said the NNPC Ltd has declared a state of emergency on production in Nigeria’s oil and gas industry.
“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 GCEO declared.
According to him, 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 in a timely manner.
He said the “war” will help NNPC Ltd. 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 Ltd. 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 called on all players in the industry to collaborate towards reducing the cost of production and boosting production to target levels.
He expressed the Company’s commitment to investing in critical midstream gas infrastructure such as the Obiafu-Obrikom-Oben (OB3) and the Ajaokuta-Kaduna-Kano 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 Ltd. has since keyed into the Presidential CNG drive, adding that in conjunction with partners such as NIPCO Gas, NNPC Ltd. has built a number of CNG stations, 12 of which will be commissioned on Thursday in Lagos and Abuja.
