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Home Opinion NNPC Ltd's rebound in crude production By Kabir Usman Kano, PhD.

NNPC Ltd’s rebound in crude production By Kabir Usman Kano, PhD.

By Kabir Usman Kano, PhD

There was a rumour recently that the Dangote Refinery cannot start crude processing as scheduled because the Nigerian National Petroleum Company Ltd (NNPCL) had no crude to supply to the huge refinery.

The rumour created doubt and self-pity among Nigerians before the NNPC, led by its Group Managing Director and Chief Executive officer, Mele Kyari, issued a statement assuring Nigerians that the refinery will be supplied around six million barrels soon.

There is no doubt that the Mele Kyari-led NNPC Limited is now in a position to live up to its reputation as a reliable supplier of its various grades of crude oil to its customers worldwide, including Nigeria’s Dangote Refinery.

The Executive Director, Crude & Condensate, NNPC Trading Limited, Maryamu Idris disclosed at the recent edition of the Argus European Crude Conference in London that, crude petroleum production in Nigeria has rebounded to the extent that the reliability of NNPC Limited as a supplier of oil to its customers is assured.

“In September 2023, Nigeria recorded its highest crude oil and condensate output in nearly two years, reaching 1.72 million barrels per day. This, we believe, is just the beginning of our production rebound,” she said.

Maryamu admitted that, like all other oil producers, Nigeria had some productions impediments such as the COVID-19 pandemic, muted investments in the upstream sector, broken supply chain which impacted upstream operations, aged oil fields and massive oil theft by criminals.

These impediments which led to serious decline in oil production in the second half of 2022 and early 2023 have been reversed by the concerted effort ot the NNPCL management led by Mele Kyari.

Maryamu listed the steps taken by the oil giant to stem the tide of decline and restore production to the current level of 1.7 million barrels per day include the introduction and implementation of a new framework for the domestic petroleum industry, the Petroleum Industry Act (PIA o 2021).

The new framework for the industry based on the PIA has rejuvenated the business landscape and re-positioned NNPC Limited to adopt and deepen commercial approach to the management of the nation’s hydrocarbon endowments.

Enabled by the provisions of the Act, NNPC Limited has secured partnerships with strong financial institutions to promote and secure upstream investments to enable the company to sustainably grow production capacity in the coming years.

The Executive Director noted that while the volume of crude oil purchased daily by India, hitherto Nigeria’s biggest buyer has significantly dropped from 250,000 barrels per day to 120,000 barrels per day, Nigerian crude going to Europe has increased. This makes for the lost supply occasioned by banning Russian crude. Nigeria now supplies 730,000 barrels of crude daily to European buyers. The volume was 678,000 bpd before war broke out between Russia and Ukraine.

Maryamu Idris announced the introduction of the Nembe Crude Oil grade during the Argus Crude Conference. The new crude grade has low sulphur and low carbon due to flare gas elimination. So far two cargoes of 950,000 barrels each of the Nembe Crude Oil grade were exported to France and the Netherlands.

Sources say that “Nigeria’s petroleum is classified mostly as “light” and “sweet”, as the oil is largely free of sulfur. Nigeria is the largest producer of sweet oil in OPEC.”

Just as the NNPCL succeeded in higher crude production under the leadership of Mele Kyari, the additional volume exported to Europe, the introduction of the Nembe grade of crude, the Company has signed a Memorandum of Understanding with the government of Niger state on the development of renewable energy and low-carbon solutions projects.

Niger state governor, Mohammed Umaru Bago said the Memorandum of Understanding was for “cooperation in the prevention and development of renewable energy and low carbon solution projects.”

The agreement could lead to the joint establishment of a solar or wind farm by the two parties in the state to generate electricity. Low-carbon energy and renewable energy could be derived from any of four sources namely wind, solar, hydro or nuclear power.

Niger state hosts four hydropower generating stations at Shiroro, Kainji, Jebba and Zungeru. So far nuclear power is not explored as a source for energy in Nigeria.

Kabir Kabo Usman (BSc, MSc, Ph.D., Cert Ed, PGCE, TDLB, FCIA, FABS. FNIMN, FNIP) Phd graduate of petrochemical and hydrocarbon Chemistry at Manchester University, Harvard University Kennedy School of Governance and Leadership Consultant at Victoria University Melbourne Australia


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