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Mele Kyari to IOCs: Nigeria Will Produce Its Oil, Won’t Wait for You – This Day News

BREAKING 

•GCEO declares a state of emergency on crude production 

•Delay in concluding divestment detrimental to Nigeria, say producers

By Emmanuel Addeh and Peter Uzoho in Abuja

The Nigerian National Petroleum Company Limited (NNPC) yesterday told divesting multinational oil companies as well as International Oil Companies (IOCs) giving difficult conditions for oil exploration in the country to rethink their strategies.

Group Chief Executive Officer of the national oil company, Mr Mele Kyari, told an audience at the ongoing Nigeria Oil and Gas (NOG) conference in Abuja that the era of non-ending negotiations as joint venture partners was over.

Kyari admitted that processes in the industry had been overly slow, blaming the  “sheer inability of all of us, including our partners of inability to act quickly and  in a timely manner.”

Kyari insisted that the time for debates was over, explaining that it was time to produce more oil and more gas, rather than the unending debates.

“Let me just speak my mind. We went down on our production, both oil and gas nowhere near our capacity or ability.  We can blame anything from oil theft, pipeline integrity, and so on. But the bottom line is the… sheer inability of all of us, our partners, with no exception,  including the NNPC to act quickly in a timely manner.

“That is why as the partner of 80 per cent of those who produce oil and gas in this country, we have decided that we’ll stop the debate and we have declared a war, meaning we have the right troops.

“We know what we have to do at the level of assets and we have engaged. Any partner that doesn’t do what they should do, we will get it done. This is the only way of doing things. We can’t wait for anyone. We are moving on. We cannot afford to negotiate any further. So, we will stop the debate and that is why we have a war room,” he stated.

On the replacement of oil pipelines, which he said had been in existence for over 60 years, Kyari stated that Nigeria will no longer wait for IOCs to fix the problem, describing it as a national decision.

In a move towards increasing Nigeria’s crude oil production and growing its reserves, NNPC declared a state of emergency on production in Nigeria’s oil and gas industry.

According to him, a detailed analysis of assets revealed that Nigeria can conveniently produce 2 million barrels of crude oil per day without deploying new rigs.

On medium to long-term measures aimed at boosting and sustaining production, Kyari said NNPC would replace all the old crude oil pipelines and 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 has since keyed into the presidential CNG drive, adding that in conjunction with partners such as NIPCO Gas, NNPC has built several CNG stations, 12 of which will be commissioned on Thursday in Lagos and Abuja.

In her remarks, the Special Adviser on Energy to President Bola Tinubu, Olu Verheijen, said that Nigeria has only succeeded in capturing about 4 per cent of the continent’s investments since 2016.

He said that Nigeria was working on mutually beneficial fiscal incentives that will facilitate the deepwater projects which will be critical to Nigeria’s target of 4 million barrels per day and reliability of gas supply into domestic regional and international markets.

To bridge the gap in metering and reduce revenue losses in the power sector, he stated that with modern smart meters, collection losses are expected to decrease which will generate more revenue and improve the financial liquidity of the sector.

“ Additional measures are being taken to ensure that those who can afford to pay a realistic electricity price do so without subsidies while we continue to protect and subsidise the poor and vulnerable.

“This will make funds available to settle power sector debts including gas sector debts while we implement a comprehensive plan to adjust prices reasonably and support the economically disadvantaged,” she stressed.

Also speaking, the Minister of State, Petroleum Resources (Gas), Ekperikpe Ekpo, said that Nigeria was particularly focused on promoting gas-based industries such as fertilisers, petrochemicals, and methanol.

“Meeting the growing energy demands of our nation and the continent is a priority for the ministry. We recognise that natural gas is central to achieving this goal, given its status as a cleaner and more efficient fuel.

“ Our gas-to-power initiatives are pivotal, aiming to provide reliable and affordable electricity that supports industrialisation and improves living standards,” he added.

Also, for the umpteenth time, indigenous Nigerian oil and gas producers under the aegis Independent Petroleum Producers Group (IPPG) have raised concerns over the continuous delays by the federal government to conclude ongoing divestment transactions between some international oil companies (IOCs) and the buying local companies.

Chairman of IPPG, Mr. Abdulrazaq Isa, in his industry address at the event, specifically said that the long-overdrawn delays in concluding the IOCs divestment deals were costly to the Nigerian petroleum industry and extremely detrimental to the country as a whole.

Notwithstanding some laudable policies and the gradual positive turnarounds being experienced, he maintained that the industry was in dire need of extraordinary focus to mitigate the genuine concerns on its long-term sustainability.

According to him, despite Nigeria’s world class hydrocarbon resource base of over 37 billion barrels of proven crude oil reserves and overb207 trillion cubic feet (tcf) and 600 tcf of proven and contingent gas reserves respectively, the country finds itself in a situation where daily production has significantly dropped.

“We now run the risk of partial implementation of our national budget considering an estimated deficit of 400,000 bpd from the forecasted 1.78 million bpd.

“This portends another frightening dimension when we consider that in the not-too-distant future, our overall installed domestic refining capacity, currently closing in on about 1.2 million barrels per day, may soon outstrip our current crude oil production level with the risk of Nigeria finding itself in a position where it is unable to meet its domestic refinery crude demand or even become a net importer of crude oil.

“It is against this scary backdrop that IPPG is calling for urgent measures to be undertaken by all relevant stakeholders to immediately arrest this dwindling production level and under-investment by focusing on the following priority areas,” he said.

He called for immediate conclusion of all pending IOC divestment transactions, positing that that the IPPG strongly advocates that their member companies such as Seplat, the Renaissance Consortium and Oando have the proven track record to successfully take over and manage the onshore and shallow water assets to realise incremental production in the region of 100,000–200,000 barrels.

Secretary General of the Organisation of Petroleum Exporting Countries (OPEC),  Haitham Al Ghais, said that OPEC sees a bright future ahead for energy, with significant opportunities for robust long-term growth.

“We see energy demand rising by an estimated 23 per cent by 2045. This will be fuelled by a world economy that is expected to double in size, growing from $138 trillion last year to $270 trillion in 2045,” he stated.

Minister of State, Petroleum Resources (Oil), Senator Heineken Lokpobiri, in his remarks, stated that Nigeria was committed to creating a conductive environment for investors.

See Dollar to Naira black market today, Pound to Naira, Euro to Naira, Dollar to Naira CBN rate and Dollar to Naira Bank rate today.

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