“NNPCL Declares Emergency in Crude Oil Production, Urges Collaboration to Cut Costs”

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

Group Chief Executive Officer of NNPC Ltd, Mr. Mele Kyari, disclosed this in a keynote address at the opening ceremony of the 23rd edition of the Nigeria Oil & Gas Conference and Exhibition (NOG Energy Week) in Abuja, on Tuesday.

“We have decided to stop the debate. We have declared war on the challenges affecting our crude oil production. War means war. We have the right tools. We know what to fight. We know what we have to do at the level of assets. We have engaged our partners. And we will work together to improve the situation,” the GCEO declared.

He highlighted that Nigeria has the capacity to produce two million barrels of crude oil daily without additional rigs, based on thorough asset assessments. However, the principal barrier remains the lack of prompt action by industry stakeholders.

He said the “war” will help NNPC Ltd. and its partners to speedily clear all identified obstacles to effective and efficient production such as delays in procurement processes, which have become a challenge in the industry.

On medium to long-term measures aimed at boosting and sustainingp roduction, Kyari said NNPCL would replace all the old crude oil pipelines built over four decades ago and also 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 Ltd. has since keyed into the Presidential CNG drive, adding that in conjunction with partners such as NIPCO Gas, NNPC Ltd. has built a number of CNG stations, 12 of which will be commissioned on Thursday in Lagos and Abuja.

NNPC Ltd’s CEO, Mr. Mele Kyari, emphasized that the declared “war” aims to swiftly eliminate obstacles hindering efficient crude oil production, particularly procurement delays plaguing the industry.

For sustainable production enhancements, Kyari outlined plans to replace aging crude oil pipelines from the 1970s and implement a rig-sharing initiative to keep production rigs operational in Nigeria for four to five years, aligning with global standards.

He urged industry stakeholders to unite in slashing production costs and ramping up output to optimal levels.

Additionally, he says, NNPCL remains committed to vital investments in midstream gas infrastructure like the OB3 and Ajaokuta-Kaduna-Kano gas pipelines, aiming to bolster domestic gas production for power generation and industrial growth, fostering economic prosperity.

Regarding Compressed Natural Gas (CNG), Kyari noted NNPC Ltd.’s alignment with the Presidential CNG initiative, highlighting collaborations with partners such as NIPCO Gas to establish numerous CNG stations. Twelve of these stations are set for inauguration in Lagos and Abuja on Thursday, underscoring NNPC Ltd.’s proactive role in advancing clean energy solutions.

The opening ceremony of the NOG Energy Week also saw goodwill messages and keynotes presented by the Secretary General of the Organisation of the Petroleum Exporting Countries (OPEC), Haitham Al Ghais; Secretary General of the Gas Exporting Countries Forum (GECF), Engr. Mohamed Hamel; Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri; Minister of State for Petroleum Resources (Gas), Rt. Hon. Ekperikpe Ekpo; Special Adviser to the President on Energy, Ms. Olu Verheijen as well as the Chairman, Independent Petroleum Producers Group (IPPG), Mr. Abdulrazaq Isa.

NNPC Ltd. is the Principal Sponsor of 2024 NOG Energy Week Conference & Exhibition which has as its theme “showcasing opportunities, driving investment and meeting energy demand.”