Fundamentals About "State of Emergency" Declared on Nigerian Oil and Gas by NNPC

By Adedayo Osho

As Nigeria continues to embark on the journey towards improving crude oil production and growing its reserves, the country's oil company, NNPC Ltd has declared a "state of emergency" in the country's oil and gas industry.

This was disclosed by the Group Chief Executive Officer of NNPC Ltd, Mele Kyari, while delivering his 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 2nd of July, 2024.

Kyari declared that "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."

Currently, the actual national production averages 1.33 million barrels of oil per day (BPD) and 256, 000 barrels of condensate per day, the national technical production potential currently stands at 2.26 million bpd while the current Organization of Petroleum Exporting Countries (OPEC) quota is 1.5 million bpd.

He said a detailed analysis of assets indicated that Nigeria can conveniently produce two million barrels of crude oil per day without deploying new rigs, but the major hurdles in achieving same remains the inability of players to act in a timely, responsive manner.

He assured 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.

At the event presently held at the International Conference Centre (ICC) Abuja, Kyari called on all players in the industry to collaborate towards reducing the cost of production and boosting production to target levels.

He also 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.

Regarding the Compressed Natural Gas (CNG) project - aimed at considering alternative sources of fuel - Kyari clarified that NNPC Ltd. has since keyed into the Presidential CNG initiative, revealing 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 4th of July, in Lagos and Abuja.