Yemisi Izuora
The federal government has set a fresh production target for the oil industry with a plan to double oil production and triple its refining capacity by 2025, reviving previous pledges for the country’s oil independence.
Maikanti Baru, Group Managing Director, GMD, of the Nigerian National Petroleum Corporation, NNPC, said at the conference of the Society of Petroleum Engineers, SPE, Thursday in Abuja, that Nigeria needs to unlock new barrels as quickly as possible as the country looks at producing 4 million barrels of oil a day, MMbopd by 2025 and increase refining capacity to 1.5 MMbpd
Nigeria had previously set a 4 MMbopd production target for 2010, but failed to realize the target over the years as current output peaked near 2.5 MMbpd in the middle of the last decade, as a result of militant attacks, leakages and theft at its oil infrastructure.
Nigeria also wants to be self-reliant in meeting its fuel demand and cut imports that put a strain on foreign reserves.
Minister of state for petroleum resources, Ibe Kachikwu told the BBC in 2017 that he would step down if the country fail to achieve that goal by the end of this year. The target is likely to be missed as the four state-owned refineries struggle to fully utilize their combined 445,000 bopd capacity following years of neglect and mismanagement.
Baru said part of the additional refining would come from a 650,000 bopd complex being built near Lagos by Aliko Dangote, Africa’s richest person. NNPC is working with private investors for the remainder, Baru said.
Targets such as these are not new to NNPC,” said Cheta Nwanze, an analyst at Lagos-based SBM Intelligence. “Nigeria has not met a single production target for at least a decade now, in many cases because of security concerns.”
“The desperate need for an improvement in local refining capacity has been obvious for decades,” Nwanze said. The 2025 plan is “extremely optimistic.”
NNPC, which pumps crude from the country’s fields in partnership with international companies like Royal Dutch Shell Plc and Exxon Mobil Corp., returned to profit in 2018 after reporting losses in at least the three previous years, according to statements on its website. That was mainly due to the strong performance of its oil and gas production unit. Its refineries had a $365 million operating loss.