Yemisi Izuora
The federal government is anticipating its crude oil production to rise to 2.5 million barrels per day, BPD, by 2019, from 2.2 million bpd capacity now, the Ministry of Petroleum Resources said.
The government which hopes to achieve this having created a new funding arrangement for the joint ventures with international oil majors also made the first US$400 million payment it owes to the international oil companies (IOCs) for the outstanding joint venture cash calls.
That payment was part of a cash call debt owed to the majors in 2016, Nigeria’s Oil Minister Emmanuel Ibe Kachikwu said at the Offshore Technology Conference in Houston the USA.
Government signed a deal in December 2016 with Shell, ExxonMobil, Chevron, Total, and Eni, under which the country would exit the so-called cash call system of contributing money to fund its equity in the joint ventures.
Back then, the Nigerian National Petroleum Corporation (NNPC) said that according to minister Kachikwu, “the consensus in the industry is that with the signing of agreements to exit cash calls, investments would soon flow into the Nigerian Oil and Gas Industry.”
“The sustainable funding of the JVs will lead to an increase in national production from the current 2.2mbpd to 2.5mbpd by 2019, while the immediate effect of the new cash call policy will increase net Federal Government Revenue per annum by about $2 billion,” the ministry of petroleum resources said in statement.
Currently Nigeria’s production is not exceeding 2 million bpd, and currently sits at around 1.9 million bpd, including 350,000 bpd in condensates, according to S&P Global Platts.
OPEC’s secondary sources pegged Nigeria’s crude oil production at 1.545 million bpd in March, down from 1.575 million bpd in February but government is planning to increase its crude oil output.
The country is planning to complete repair work on the Forcados pipeline and maintenance at the Bonga field by July.
Following these, crude oil production should rise to 2.2 million bpd, from 1.27 million bpd in March. The March crude oil output was affected by maintenance at Bonga, which produces 225,000 bpd.