By Salisu Dambatta
As the Nigerian National Oil Company (NNPC) Limited becomes a totally commercial outfit, the Organization for the Oil Exporting Countries (OPEC), has acknowledged that Nigeria’s petroleum production was the most improved among its members that upped their production in January 2023.
OPEC said in its February 2023 Monthly Oil Market Report (MOMR) that Nigeria’s oil production has risen month-on-month, (MoM) by 1.9 per cent to 1.258 million barrels per day in January 2023, from 1.235 million barrels per day achieved in December 2022. This was excluding condensate.
The increase was below the 91,000 barrels per day recorded in December 2022. It still surpassed the increase recorded by Angola in the period under review.
Group Managing Director of the Nigerian National Petroleum Company (NNPC) Limited, Mai Mele Kyari attributed the increase in oil production to the successful curtailing of vandalisation of oil industry installations, reduced crude oil theft, increased protection for assets, frequent surveillance and the application of technology to instantly detect any breach of crude pipelines. All these measures were approved by President Muhammadu Buhari.
Alhaji Kyari expressed optimism that in 2023, Nigeria’s oil production could average 2.2 million barrels per day, including condensate.
Industry watchers noted that Kyari’s optimism is justified by the recent remarkable rise in rigs count from six to 13 between January 2022 and January 2023, indicating a big swing towards pumping out more oil from the ground.
He linked the all-time fall in production to a security challenge which became manifest early in 2022 and said, “Of course, we took definite steps to bring back production and this is paying off.”
His optimism for a huge leap in oil production is of great importance for a country that earns nearly 90 per cent of its foreign exchange and over 60 per cent of government revenue from petroleum sales.
The prospects of sustained rebound of the Oil and Gas sector is visible in its contribution to the Gross Domestic Product (GDP). The National Bureau of Statistics reported it thus, “The Oil sector contributed 4.3% to the total real GDP in Q4 2022. The total annual contribution of oil to aggregate GDP in 2022 was 5.67%.”
Under Kyari’s stewardship, with requisite support from President Buhari, and as envisaged by the Petroleum Industry Act (PIA), the NNPC Ltd is evolving into a commercial for-profit entity; it has minimised government control and interference as it intensified exploration activities in the inland basins to boost the country’s oil reserve.
Over a billion barrels were discovered in the two Kolmani River Wells drilled in the North Eastern states of Bauchi and Gombe within the Upper Benue Trough.
Consequentially, President Muhammadu Buhari flagged off the $2 billion Kolmani Integrated Development Project (KIPRO) on 22nd November 2022.
The project comprise a medium-size refinery, a liquefied gas processing plant, a urea fertiliser factory and a power generation house to supply electricity to the complex and neighbouring communities.
And following the coming into force of the Petroleum Industry Act (PIA) 2020, NNPC Ltd was able to secure a $1.4 billion loan from foreign investors. The cash will be used in drilling 37 development wells for oil and gas in Delta state.
The Company has discovered oil in Keana and Obi Local Government Areas of Nasarawa state. Drilling of wells are scheduled to commence in March 2023.
One other signature of success by the team led by Mele Kyari at the NNPC Ltd was the approval for the company to become a part-owner of the Dangote refinery with a 20 per cent shareholding for $2.76 billion.
It is also on record that the Federal Government through NNPC Limited signed new Production Sharing Contracts (PSCs) between NNPC Limited and its partners. All outstanding Join Venture cash calls have been cleared
An estimated 10 billion barrels of crude oil and over $500 billion (N209 trillion) in monetization could be earned by Nigeria from the six Oil Mining Leases (OMLs) the government renewed for 20 years under the agreement.
The unrelenting drive by Alhaji Mele Kyari to leave his signature on the oil industry in Nigeria, came to light in his determination to revamp the four crippled refineries owned by the NNPC Ltd. Contracts were awarded for reactivating them.
The last of such contracts worth $740.6 million was for the repairs of Kaduna Refinery and Petrochemical Company (KRPC) Limited. It will be restored to refine crude oil at 60 percent of its 110,000 barrels per day capacity.
It is historic that the (KRPC) Ltd, which was established under the supervision of Muhammadu Buhari as Minister of Petroleum in a military government, is being refurbished with his approval as an elected President and Minister of Petroleum Resources.
Salisu Na’inna Dambatta wrote Dambatta town.
