The Federal Government of Nigeria has announced through the Nigerian National Petroleum Company Limited (NNPCL) that it is expecting a number of oil blocks and fields in the Niger Delta basin to boost national oil production to between 1.7 and 1.8 million barrels per day (bpd) between 2023 and the end of 2024. Nigeria relies heavily on the export of crude oil for revenue generation and foreign exchange earnings. The decades-long rift between the government and the militants in the region have affected the country’s oil output.
In 2022, Nigeria crude oil production fell below one million bpd, a record low in the last decade. As far back as during the administration of President Umaru Musa Yar’adua, the Movement for the Emancipation of the Niger Delta (MEND) had been clamoring for the betterment of their situation. This was during the first tenure of President Buhari, specifically in 2016, when the Niger Delta Avengers blew up scores of pipelines in order to hold the government to ransom. Of course, apart from these major militants, pockets of others ran their illegal refineries and vandalized pipelines to steal oil. All these have greatly reduced the amount of oil that Nigeria exports so much that the country cannot meet the quota set by the Organization of the Petroleum Exporting Countries (OPEC).
Government will achieve new output limit through renewed measures.
NNPCL executive vice president, Mr. Adokiye Tombomieye, gave the hints during a presentation at the just-concluded Nigeria Oil and Gas (NOG) Energy Week, which was held in Abuja, with the theme: “Powering Nigeria’s Sustainable Energy Future.” Represented by NNPC Upstream Business Advisor, Mr. Igandan Olanrewaju, during a panel session with the topic: “Defining the Roadmap for the Future of Nigeria’s Upstream Sector,” Tombomieye stated in a pre-panel presentation that the new production targets would be achieved through a couple of measures including asset integrity, production ramp-up, well interventions, new drillings, alternative crude oil evacuation, and improved security architecture.
He explained that the NNPC in collaboration with its partners had resumed crude oil production in earlier challenged areas like the Oil Mining Leases (OML) 29, 18, and 24 and that they expect to ramp up to about 80,000 bpd with its joint venture (JV) partners by the third quarter (Q3) 2024. He went over each oil field and oil block during the session, including Obodo and Kalaekule fields, explaining how their production is expected to be. He stressed that realizing the full potential of the projects listed above requires a conducive investment climate, saying that was where the new NNPC structure comes into play.
Tombomieye addresses the issues raised concerning the PIA Act.
Established under the auspices of the PIA, he said that the NNPC aimed to announce the oil and gas sector’s transparency, accountability and efficiency. According to him, by separating the regulatory and commercial functions of the sector, NNPC structure creates a level playing ground for investors, mitigates conflict of interest, and fosters a conducive environment to attract local and foreign investments. He said that the streamlined governance and increased operational autonomy of NNPC will undoubtedly bolster investor conferences and drive sustainable growth in the sector.
Meanwhile, this was just as the multinational oil firms and the Nigerian independent producers under the aegis of Oil Producers Trade Section (OPTS) and Independent Petroleum Producers Group (IPPG) have condemned the Finance Act 2022. They said that the Act has diminished the benefits brought by the Petroleum Industry Act (PIA) 2021. Addressing the PIA’s impact on investor appetite for upstream development, he said that the bill represents a landmark reputation that will reform and revitalize the Nigerian oil and gas sector. “While any significant regulatory change can create uncertainties, the PIA’s long-term benefits outweigh the short-term challenges,” he said.
Vice President gives further clarifications on the bill.
Furthermore, the vice president said that the Act introduces a progressive fiscal framework that provides a fair and competitive investment environment. He said that it promotes the development of host communities, local content participation and technologies transfer. These measures contribute to a more stable investment climate, attracting traditional investors as well as new entrants in the upstream sector. Tombomieye also pointed out that the multinational oil firms and the Nigerian independent producers under the aegis of Oil Producers Trade Section (OPTS) and Independent Petroleum Producers Group (IPPG) had submitted a petition regarding clarifications around specific sections of the Finance Act 2022, saying the Act would diminish the benefits of the PIA 2021.