The Nigerian National Petroleum Company Limited (NNPC Ltd) on Tuesday declared a state of emergency on Nigeria’s crude oil production.
NNPC Ltd Group Chief Executive Officer, Mele Kyari, made the statement while speaking at the ongoing Nigeria Oil and Gas (NOG) Energy Week 2024 in Abuja on Tuesday.
Mr Kyari said the move is aimed at boosting Nigeria’s crude oil production and increasing its reserves.
“We have decided to end 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 need to do at the asset level. We have engaged our partners. And we will work together to improve the situation,” Kyari said.
He explained that a detailed analysis of the assets revealed that Nigeria can comfortably produce two million barrels of crude oil per day without deploying new platforms, but the main impediment to achieving this remains the inability of players to act in a timely manner.
“War will assist NNPC Ltd and its partners to quickly overcome all identified obstacles to effective and efficient production, such as delays in procurement processes, which have become a challenge in the industry,” he added.
On medium and long-term measures aimed at boosting and sustaining production, Mr Kyari said NNPC Ltd would replace all old crude oil pipelines built more than four decades ago and also introduce a platform sharing programme with its partners to ensure that production platforms remain in the country for four to five years, which is the standard practice in most climates.
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However, he called on all industry players to collaborate to reduce production costs and increase output to target levels.
Mr. Kyari expressed the company’s commitment to investing in critical midstream gas infrastructure such as the Obiafu-Obrikom-Oben (OB3) and Ajaokuta-Kaduna-Kano pipelines to boost domestic gas production and supply for power generation, industrial development and economic prosperity of the country.
In his speech, Haitham Al Ghais, Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC), said global energy demand will increase by about 23 percent by 2045.
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“Energy demand is estimated to increase by 23 percent by 2045. This will be driven by a global economy that is expected to double in size, growing from $138 trillion last year to $270 trillion in 2045.
“We also project a rapid expansion of the global population to more than 9.5 billion people, with most of the growth occurring in non-OECD developing countries. Urbanisation alone will cause more than 500 million people to move to cities around the world by 2030. This data tells us that the world will need all forms of energy to meet its long-term energy needs,” he said.
He explained that oil and gas will continue to be the predominant fuels in the energy matrix.
He said oil alone will maintain its share at nearly 30 percent in 2045, as global oil demand soars to an estimated 116 million barrels per day (bpd) by then.
To cope with this rapid and robust growth in energy consumption, he said, the industry needs to significantly increase investment levels in the coming years.
“According to our research, cumulative investment needs in the oil sector between now and 2045 will amount to around $14 trillion or around $610 billion on average per year. Securing this vital financing is essential to maintaining security of supply and avoiding unwanted volatility,” he added.
In fact, he said, the rush to adopt “Net-Zero” strategies was misguided and simply unrealistic.
“Developing countries continue to seek a balance between the priorities of developing their national economies and combating climate change. In this regard, OPEC and its member countries continue to advocate for a balanced and fair process of adaptation, mitigation and means of implementation, particularly with regard to financing and technology to address climate change.
“This is crucial for Africa, to ensure that its unique circumstances are respected and taken into account. And finally, we must not relent in our efforts to address the problem of energy poverty. It is a sad fact that even today there are an estimated 675 million people without access to basic forms of energy and 2.3 billion without access to clean cooking fuels.
“World leaders must come together and advocate for the support and resources needed to make a difference in addressing this important issue,” she said.