Oando Plc, is planning oil production increase with a 25 per cent target rise by 2019.
This plan is coming as the company recently emerged from a $2.5 billion debt burden built up through the 2014 acquisition of oil and gas assets from U.S. giant, ConocoPhillips.
Wale Tinubu, Group Chief Executive Officer (GCEO), who announced this on the sidelines of an Energy Summit in Abu Dhabi, noted that the ambitious target will take the company’s production to 50,000 barrels daily from 40,000 in the space of a year.
He also added that the company targets an increase of 50,000 barrels daily over the next three years, at which point the company’s total production would more than double from current levels to 90,000 barrels daily.
The Group CEO says he expects further downward pressure on crude oil prices.
According to him
“There will be a lot more oil coming to the market. I see a lot of volatility with a long-term downward trend in prices. Oil price may drop to $60/bbl next year.”
He further added that the market needs to prepare for greater U.S. exports, noting that the U.S. shale production will be enough to outweigh declines elsewhere.
The company’s nine months financial result for the period ended 30th September shows a surge in revenue from its exploration and production section by 56 per cent from N76 billion in 2017 to N118.8 billion. While revenue from supply and trading also grew by 26 per cent during the period.
Oil prices have been on the increase crossing the $80 per barrel mark in what was not only good news for the economy but for oil companies in Nigeria. However, oil prices have headed south in November, falling as low as $65 per barrel on Tuesday this week.
Nigeria’s crude oil production is currently at a deficit of about 200,000 barrels with an average production of 1.8 million barrels per day, below the budgeted benchmark of 2.0 million barrel per day.