SOME energy experts are seeking actions on oil theft as the Nigerian National Petroleum Company Limited (NNPCL) has declared a state of emergency in the country’s oil and gas industry to increase crude oil production and grow its reserves.
The state of emergency declaration was contained in a statement on Tuesday, July 2, signed by NNPCL’s chief corporate communications officer, Olufemi Soneye, posted on the company’s official X handle.
According to Soneye, the NNPCL Group Chief Executive Officer, Mele Kyari, made the declaration 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,” he quoted the GCEO to have said.
According to Kyari, a detailed analysis of assets revealed that Nigeria can conveniently produce two million barrels of crude oil per day without deploying new rigs, lamenting that the major impediment to achieving it remains the inability of players to act promptly.
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, Kyari maintained.
The NNPCL boss said the company 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 also called on all the players in the industry to collaborate towards reducing the cost of production and boosting production to target levels.
Kyari added that the NNPCL was committed to investing in critical midstream gas infrastructure to boost domestic gas production and supply for power generation, industrial development, and economic prosperity of the country.
Commenting on the state of emergency declaration, a former President of the Nigerian Society for Petroleum Engineers, Joe Nwakwue, told the ICIR that every Nigerian should be worried about the output level of its oil production with the rise in the price of crude oil at the International market.
“It is a shame that we are unable to take advantage of an extended period of global high oil prices that we have seen since at the global oil market. We are not meeting up with our OPEC quota. The issue of insecurity in the oil-rich region is still a concern.
“Declaring a state of emergency doesn’t change anything. We must ask what are the deliverables for respective agencies and task them on the achievement. We need to expand investments in the upstream level and the relevant agencies create the enabling environment for that,” he added.
An economist, Kalu Aja, believes the Nigerian government is not doing enough to curb oil theft and create an enabling environment for petroleum investors.
“This is our major source of revenue for now and we need to guard it jealously. Our inability to meet up with our OPEC quota is a major concern. This is a major setback in having a maximum supply of dollars in Nigeria’s foreign exchange market. We need to stop crude oil theft of our national oil,’ he said.
The ICIR reported recently that Nigeria’s crude oil production volume has been dropping consecutively since the beginning of the year.
In January, Nigeria produced 1.43 million barrels per day (bpd) below the OPEC-assigned quota.
It dropped to 1.32 million bpd in February, to 1.23 million bpd in March, to 1.28 million bpd in April, and to 1.25 million bpd in May.
The ICIR also analysed in the report that Nigeria was losing over N16 billion in revenue daily from crude oil production amounting to N1.62 trillion between January and May 2024 as oil production volume dropped rapidly.