Kyari Rejects Moves By Senate To Increase Tinubu’s 1.78mbpd Oil Production Benchmark To 1.8m

Kyari Rejects Moves By Senate To Increase Tinubu’s 1.78mbpd Oil Production Benchmark To 1.8m

On Friday, the Nigerian National Petroleum Company Limited (NNPCL) opposed the Senate’s attempt to raise the crude oil production benchmark for President Bola Ahmed Tinubu in the 2024 Appropriation Bill from 1.78 million barrels per day to 1.8 mbpd.

During an interactive session with the Senate Committee on Appropriations in Abuja, NNPCL’s Group Chief Executive Officer, Mele Kyari, rejected the proposal presented by Senator Solomon Adeola, the Chairman of the Committee.

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

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Despite the country’s current daily oil production averaging 1.5 million barrels, Kyari urged the Committee to adhere to the benchmark proposed by President Tinubu, emphasizing that the crude oil price and production benchmarks were formulated based on the evolving dynamics of the global oil market.

The NNPCL CEO expressed confidence in the realism and achievability of the oil-related budgetary projections.

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 in the submissions by Mr. President.

“There is no way we will get crude oil 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 is 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 is realistic. There is no curtailment on condensates from OPEC.”

Supporting his stance on realistic estimates by President Tinubu, Kyari however warned that security challenge in the Niger Delta Region could frustrate the projections of the Federal Government, citing crude oil theft.

The NNPCL GCEO also told Senators that illegal crude oil bunkering in the oil producing states are alarming as he revealed that there are over 4,800 illegal connections on crude oil pipelines

“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  abnormally. 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 provided an update on the Turn Around Maintenance (TAM) of the nation’s four refineries.

He affirmed that the Port Harcourt refinery is expected to resume operations in December 2023, while the Warri Refinery is anticipated to restart production in the first quarter of 2024. Additionally, the CEO of NNPCL set December 2024 as the production target for the Kaduna Refinery.

However, Senators expressed dissatisfaction with the N406 billion dividend remitted to the Federation Account between July and November by NNPCL, dismissing it as an unimpressive achievement.

The legislators urged the oil giant’s management to aspire to emulate global counterparts such as Saudi Aramco and Petrobas of Brazil.

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