NNPCL Rejects Senate’s Bid To Raise Oil Production Benchmark To 1.8m

The Nigerian National Petroleum Company Limited, (NNPCL), yesterday turned down a proposal by the Senate to increase President Bola Tinubu’s crude oil production benchmark in the 2024 Appropriation Bill from 1.78million barrels per day to 1.8mbpd.

The Group Chief Executive Officer of NNPCL, Mele Kyari, told the Senate Committee on Appropriations during an interactive session Abuja that the benchmark of 1.78 bpd was realistic enough and did not require any upward review.

The review was proposed by the Chairman of the Committee, Solomon Adeola (APC – Ogun West), when the NNPCL management led by Kyari appeared before the panel.

The Federal Government in the Appropriation Bill had pegged average crude oil production at 1.78mbpd and crude oil price benchmark of $77.96 for the 2024 fiscal year.

The NNPCL GCEO told the Committee to stick to the benchmark proposed by the President in the 2024 Appropriation Bill,stressing that the crude oil price and production benchmarks were based on dynamics in the global oil market.

The NNPCL boss said the oil component of the budgetary projections were realistic and realisable despite the fact that the country currently produces average of 1.5million barrels of oil per day.

He said: “On the question around whether we adjust the oil production benchmark from 1.78mbpd to 1.8million, I still advise that we stay with the submissions by Mr. President.

“There is no way we will get crude oil for less than $70. Once economies are growing, there will be sustained demands for crude oil in our country and other countries.

“The estimates supplied by Mr. President are realistic. When we say production, we mean total production of crude oil and condensates.

“So we combine condensates and crude oil as total marginal production. So we know our estimates are realistic. There is no curtailment on condensates from OPEC.”

However, Kyari warned that security challenge,particularly crude oil theft in the Niger Delta Region, could frustrate the projections of the Federal Government.

The NNPCL GCEO described the level of illegal crude oil bunkering in the oil producing states as alarming.

He alleged that there are over 4,800 illegal connections on crude oil pipelines.

 

His words:”The situation we have in Niger Delta in terms of security is a calamity. We don’t have that anywhere in the world. To engage non-state actors as last resort as solution is abnormal.

“But we have to respond abnormaly. You have over 4,800 illegal connections on our pipelines. That means, within every kilometer, you have an insertion.

“Even if you seal all the insertions, you can’t get what you want in terms of production.

“In the Niger Delta, people are coming from all parts of the country to do illegal refining. That’s why we engage locals to deal with it.

“We will contain this challenge. We are doing everything possible to restore sanity. What is happening is a colossal damage to the environment and the host communities.”

Kyari also gave an update on the Turn Around Maintenance (TAM) of the nation four refineries.

He insisted that the Port Harcourt refinery would come on stream later this month while Warri Refinery is expected to resume production in the first quarter of next year.

The NNPCL GCEO gave December 2024 as production target of the Kaduna Refinery.

The Senators frowned at the N406 billion to Federation Account as dividend between July and November from the NNPCL as they dismissed it as nothing to cheer about.

The lawmakers tasked the management of the oil giant to strive to be like its global peers like Saudi Aramco and the Petrobas of Brazil.

Kyari, in his defence, declared that until the passage of the Petroleum Industry Bill (PIB) into law, the company was not run like a profit driven enterprise.

Senator Konbowei Friday Benson (PDP – Bayelsa Central) said during the interactive session that himself like every other Niger Deltan, could distill oil.

To this Kyari told the committee that the situation in Niger Delta in terms of security, is a calamity.

In his remarks at the end of the interface, the Chairman of the Committee, Senator Adeola, said Kyari had strengthened their conviction on workability of the assumptions and projections of the 2024 budgetary proposals by President Tinubu..