The Nigerian National Petroleum Company Limited (NNPC Ltd) declared a state of emergency on the nation’s crude oil output.
The announcement was made by the Group Chief Executive Officer of NNPC Ltd, Mele Kyari, during the ongoing 2024 Nigeria Oil and Gas (NOG) Energy Week in Abuja on Tuesday.
Kyari’s declaration shows the urgency and severity of the issues plaguing Nigeria’s oil industry.
“We have decided to stop the debate. We have declared war on the challenges affecting our crude oil production. War means war,” Kyari stated emphatically.
“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.”
A comprehensive analysis of the country’s oil assets revealed that Nigeria has the potential to produce two million barrels of crude oil per day without the need for new rigs.
However, significant barriers, primarily procedural delays, have hindered achieving this target.
Kyari stressed that the state of emergency would expedite the removal of these obstacles, particularly delays in procurement processes, which have stymied efficient production.
As part of the immediate measures, Kyari announced that NNPC Ltd plans to replace all outdated crude oil pipelines, some of which were built over four decades ago.
This modernization effort is crucial for boosting and sustaining production levels.
Also, a rig-sharing program with NNPC’s partners will be introduced to ensure that production rigs remain operational in the country for an extended period, aligning with global best practices.
Kyari called for industry-wide collaboration to reduce production costs and achieve targeted output levels.
He also highlighted the company’s commitment to investing in critical midstream gas infrastructure, including the Obiafu-Obrikom-Oben (OB3) and the Ajaokuta-Kaduna-Kano gas pipelines.
These projects aim to enhance domestic gas production and supply, supporting power generation, industrial development, and economic prosperity in Nigeria.
In a related address, Haitham Al Ghais, the Secretary-General of the Organisation of Petroleum Exporting Countries (OPEC), highlighted the anticipated rise in global energy demand by 2045.
Al Ghais noted that the world economy is expected to double in size, driving a 23% increase in energy demand.
He said oil and gas will continue to dominate the global energy mix, with oil alone projected to meet nearly 30% of the demand by 2045.
To meet the growing energy consumption, Al Ghais stressed the necessity for significant investments in the oil sector.
“Cumulative oil-related investment requirements from now until 2045 will amount to approximately $14 trillion or around $610 billion on average per year,” he said.
Securing this funding is essential to maintaining a stable supply and preventing market volatility.
Al Ghais also called for a balanced approach to energy policies, especially for developing countries, advocating for fair adaptation, mitigation, and implementation strategies.
