From Uche Usim, Abuja
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr Mele Kyari, has assured Nigerians that the current low crude oil production level will soon be jacked up as output is expected to rise to 1.8 million barrels per day (bpd) by the end of 2021.
Nigeria’s crude oil production slumped last month to 1.35 million barrels per day about 1.40 million bpd in September as Nigeria struggles to reopen some oil fields forcefully shut down by COVID-19.
As a result of that, Libya displaced Nigeria as Africa’s top oil producer.
Kyari, in an interview with Bloomberg TV on Tuesday, said oil output would peak at 1.8 million barrels a day by December and ultimately 2 million barrels when condensate, a light form of oil, is added to the sum.
He said: “It is very obvious that by the close of the year we would get back to the 1.7-1.8m barrels per day from crude only. As you may be aware, when we mention these figures, I am talking about crude oil only.
“We do produce condensate and when we combine this, we can easily hit the 2.0 million at the end of the year.
“The fact is very clear, during the COVID-19, we shut down some of these wells and they naturally don’t get back when you want them to and how you want them.
“That is what we are trying to do because we do have some challenges around the facilities and these are being taken care of. There is enormous work and intervention going on that will get us back before the end of the year.”
Kyari, however, said that OPEC+, consisting of the Organisation of the Petroleum Exporting Countries and its allies, would face challenges to quickly pump more oil if a decision was taken to do so.
He added; “may not be very, very realisable” as the finance needed to boost oil production was lacking.
I’m not sure it’ll be possible to fill the gap” quickly, partly due to a lack of financing for investment in oil fields.
“Even if we were to move, it probably could be a bit difficult to do that.”
Recently, OPEC+ decided to stick to plans to increase the global oil supply by 400,000 bpd by December.
But Nigeria has continued to perform below the OPEC quota due to reasons explained by Kyari.
Member countries of OPEC+ led by Saudi Arabia and Russia have also resisted calls by the U.S government to ramp up oil output.
This has led the United States Government to consider a release from the nation’s strategic petroleum reserve (SPR) to tackle soaring gasoline prices.
According to Kyari, such a release by the U.S would likely have a marginal and short-term effect.
“Obviously there has to be significant releases from the SPR for it to make any meaningful change,” the NNPC GMD said.
Kyari said that crude’s likely to stay above $80 a barrel for “a while to come” and $100 is “within sight”.
There are indications that oil price may hit $100/barrel as energy demand increases.