Group Chief Executive Officer (GCEO) of Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, at the weekend blamed Nigeria’s persistent failure to meet its production targets on underinvestment, theft and rising pipeline constraints.
The GCEO spoke in Lagos at a Stakeholders’ Engagement Session organised in his honour by the Nigerian Association of Petroleum Explorationists (NAPE), tagged, “An Evening with Mele Kyari: Navigating the Path Ahead.”
At the event well attended by top oil and gas industry players and investors, Kyari revealed that NNPCL was leading the task of reversing the unpalatable trend in the industry with its rig share programme. He added that the company planned to drill a cumulative 53 wells as part of efforts to ramp up production.
Kyari stated that as things were, it might be impossible to promise a two million barrels per day (bpd) oil production target.
Nigeria’s production had been hovering between 1.2 million bpd and 1.4 million bpd year-to-date, lagging below the Organisation of Petroleum Exporting Countries (OPEC) quota of 1.58 million bpd for 2024 and far below the estimated production capacity of 2.6 million bpd.
The current oil production was also below the 1.78 million bpd projected output in the 2024 national budget, with a benchmark price of $77.96 per barrel.
But sharing his thoughts at the occasion, Kyari said the focus of NNPCL, the government and the stakeholders was to ensure the utilisation of resources available to Nigeria to increase oil production and tackle many issues confronting the country.
He said increasing oil production with the huge security challenges on the onshore assets was difficult, adding that aside the security issues, availability of infrastructure to deliver the crude oil volumes to the market is also a headache to the industry
With those challenges, Kyari stated that it would be difficult to convince investors to commit their money into oil production in Nigeria, when the produce would not get to the terminal or to the market due to security issues and infrastructure deficit.
The GCEO said due to the security concerns, operators had resorted to barging and trucking their crude to the terminals, not minding the high cost, against best global industry practice.
Kyari explained, “I can see a number of people who have got marginal fields. Yes, they are drilling, but they are concerned about how to take the production to market.