NNPC Declares State of Emergency on Oil Production

By Adedapo Adesanya

The Nigerian National Petroleum Company (NNPC) has declared a state of emergency on Nigeria’s oil production after output has remained depressed at 1.46 million barrels per day despite efforts to tackle oil theft and pipeline vandalism.

The chief executive of NNPC Limited, Mr Mele Kyari, declared that with the country’s current assets, the industry has the capacity to produce two million barrels of crude oil daily.

Speaking at the opening ceremony of the 2024 Nigerian Oil Gas Energy Week in Abuja on Tuesday, he said very little effort is all that was needed to increase production.

The NNPC chief declared war on low production, stressing that while the company was ready to work and collaborate with its partners, it was also determined to leave them behind and forge ahead.

“We went down in our production of both oil and gas, nowhere near our capacity or our capability. We can blame anything, oil theft, integrity, divestments and so on and so forth. But the bottom line is that what we did very recently is to take just a deep breath and look at where we are? And when we look at the data for our production by asset, in the last three months, we discovered that we are actually at two million barrels per day. That means we are unable to sustain it.

“And we can blame anything for lack of sustainability. Yes, theft is one of them, vandal actions. But also the sheer inability of all of us, our partners, no exception, including NNPC, our inability to act quickly in a timely manner. Yes, we can blame anything including access to capital. Why don’t we have access to capital? We can blame anything.

“But what we have seen is that we are actually at two million barrels per day without doing any of the major things that we’re talking about, without bringing the new 700,000 barrels that Abdulrazak (IPPG Chairman) has talked about, without restoring the 200,000 or so that will come from divestment.

“Without even doing these, we’re actually there. And that is why we, as a partner of 80 per cent of those who produce oil and gas in this country, have decided that we’ll stop the debate”.

“And we have declared a war. War means war. We have the right troops,” he said.

“We know what to fight. We know what we have to do at the level of assets. And we have engaged our partners. Any partner that doesn’t do what it should do, we will get it done. This is our new way of doing things.

“We can’t wait for anyone. We are moving on. We cannot afford to negotiate any further. So we have stopped the debate. And that is why, by war room, what it means is that we are looking at every asset, every issue that is associated with it. We’ll partner with our counterparties. But if it doesn’t happen, we’ll get it done”.

He accused the operators including NNPC of having “principalities” amongst their staff, pointing out that procurement has been turned into a business thereby increasing cost per barrel in the Nigerian oil and gas industry.

“For us as a company, we are moving to another level and very soon we are going to cap the cost of production. If you like you can call your wife to do the contracting, no problem provided you produce the oil at $20 or so,” he told the operators.