The Nigerian National Petroleum Corporation (NNPC) has disclosed that Nigeria’s crude oil has exceeded the 2.3 million barrels per day benchmark as the average daily production hit 2.323 million barrels per day.
This disclosure was made by the Group Managing Director of the petroleum corporation, Dr. Maikanti Baru, while receiving officials from the Nigerian Union of Journalists (NUJ) in Abuja on Tuesday.
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According to Baru, the figure of crude oil output recorded on Monday was a significant improvement compared to the daily average production of 2.1 million barrels obtained in 2018. This figure also is seen to have exceeded the 2019 budget benchmark which is pegged at 2.3 million daily barrels.
“Since we came in July 2016, we had been focused on increasing production of oil and gas and condensates. At some point, our national combined production was about a million barrels; I am happy that as at the end of 2018, we have moved on, averaging last year, about 2.1 million barrels.”
The NNPC chief stated that the petroleum corporation had also recorded a significant increase in its gas output, stressing that the company has grown Nigeria’s gas production currently, to 1.5 billion standard cubic feet, SCF, per day from about 450 million standard cubic feet daily.
Dr. Baru also revealed that NNPC officials are in negotiations for foreign direct investments for the petroleum industry in Nigeria to the tune of $7 billion. This, according to Baru is a significant improvement from the 2017 figure recorded at $3.6 billion in form of FDI.
“Our drive for transparency has also produced a lot of fruits. We have been able to attract Foreign Direct Investments, FDI, into the oil and gas industry and in 2017 alone, we have attracted about $3.6 billion. In 2018, we have shot up by $3 billion; at the moment, some of our officers are in London, where they are negotiating sums in the region of $7 billion as FDI for the oil and gas sector.”
Speaking on the cost of production, the NNPC helmsmen revealed that the company has been able to minimise the cost of production to $22 from $27 per barrel in the firm’s Joint Venture operations. He further noted that the corporation is on the lookout for means to bringing the cost to $20 per barrel.
“As I am speaking, this morning, I look at our production figures, combined oil and condensates we are pushing 2.32 million barrels a day. This stability and ability to push production has come as a consequence of several factors, both internally, externally and also with the help of the media.”
When asked about the state of the Nigerian refineries, Baru disclosed that FG presently lacks funds to finance the revamping of the country’s refineries. According to him, the petroleum corporation is currently inspecting the refineries with some contractors, who will submit their findings to the financiers who will finance the rehabilitation.
“At the Port Harcourt refineries, the contractors are on site; they are carrying out every checks and lots of non-destructive testing. We believe that by the end of October we would have detailed review and we would approach our financiers, clearly on financing basis; raise the funds because they are quite willing to fund the operations.
“NNPC would do that and pay the loans as appropriate, being that government does not have sufficient funds to finance the refineries rehabilitation. That is why it is taking time.”
Note that the increase in the daily production against the 2.3 million barrels benchmark in the 2019 budget is an indication that the Nigerian oil sector is poised to generate more revenue to the country’s GDP.
However, the movement of crude oil price in the world crude oil market remains a major determining factor to capital inflow into the economy. The activities of militants in the Niger Delta region, as well as pipeline vandalism and crude oil theft, are also factors to consider.