Nigeria daily crude oil production rose by 9% to 2.09m barrels in 2018 – Baru
Nse Anthony-Uko is Abuja editorial lead at business a.m. covering finance, business, economy, federal government economic MDAs and FCT
Nigeria’s daily crude oil production output recorded an upward swing of
about 2.09million barrels in outgone 2018, translating to a 9 per cent
increment, compared with the 2017 average daily production of 1.86million
barrels,
Maikanti Baru, group managing director of Nigerian National Petroleum
Corporation (NNPC) who disclosed this on Tuesday, noted that the nation
had maintained a line of consistent year-on-year improvement since 2016.
Baru, who made the disclosure in a comprehensive end of year message to
staff of the corporation, attributed the development to the new business
models his team has put in placed at the national oil company since he
resumed office in 2016, he said in s atatement signed by Ndu Ughamadu, the
NNPC in a group general manager, Group Public Affairs Division.
According to the state owned oil firm, the Nigerian Petroleum Development
Company (NPDC), Nigerian Gas Company (NGC), Petroleum Products Marketing
Company (PPMC), Duke Oil, NIDAS and Integrated Data Services Limited
(IDSL), were among the re-engineered companies listed by the NNPC GMD in
his statement.
Baru singled out NPDC, the corporation’s Upstream flagship company, as the
major contributor to the Industry’s success story in 2018, expressing
enthusiasm on the 52 per cent daily crude oil production growth by the
company vis-à-vis its 2017 performance.
He explained in the end-of-year statement explained that the average
production from NPDC’s operated assets alone grew from an average of
108,000 of oil per day (bod) in 2017 to 165,000bod in 2018, describing the
feat as the strongest production growth within the Oil Industry in recent
times, even as he added that it was worth being celebrated.
The GMD said NPDC’s equity production share which stands at 172,000bod,
representing about 8 per cent of national daily production, was no less
impressive, saying the desired results are outcomes of initiatives his
Management team emplaced, among which, he noted, are the Asset Management
Tea (AMT) structure, Strategic Financing, Units Autonomy and security
architecture framework.
Of the Industry milestones in the outgone year, Dr. Baru described the
200,000bop addition which the Egina Floating Production Storage and
Offloading (FPSO), completed and sailed away to location in August last
year, added to nation’s daily production, even as he disclosed that the
project achieved First Oil at 11.20pm on 29th December, 2018.
The NNPC GMD relayed to staff, a save of $1.7billion dollars by NNPC, with
corporation’s Joint Venture (JV) partners over a five-year tenor repayment
plan, saying already the corporation has defrayed $1.5billion of the
arrears.
Baru made the promise that NNPC would stick to the Repayment Agreement
with the JV Partners while transiting to self-funding IJV modes with the
corporations partners, saying that tiding up the Cash Call issues has led
to increased commitment and enthusiasm to invest in Nigerian Oil and Gas
Industry even as it has also boosted NNPC’s credit profile
internationally.
The NNPC boss concluded the achievements of NNPC in the Upstream sector by
listing other milestones achieved by his team to include: reduction in
contracting cycle for Upstream Operations to nine months from an average
of 24, even as the corporation targets a six months cycle; lowering of
production cost from $27/barrel to $22/barrel; and improving on the
security situation in the Niger Delta through constructive engagement and
dialogue with relevant stakeholders.
He also revealed that in the frontier basins, NNPC has intensified
explorations activities in the Benue Trough, with the expected spudding of
Kolmani River Well 2 on 19th January, 2019.
He explained that activities would resume in the Chad Basin as soon as
there is a greenlight on the security situation in the enclave.
In the Midstream, the NNPC GMD stated that in 2018, Nigeria achieved an
average national daily gas production of 7.90bscf, translating to 3 per
cent above the 2017 average daily gas production of 7.67bscf.
He said out of the 7.90bscf produced in 2018, an average of 3.32bscfd
(42%) was supplied to the Export market, 2.5bscfd (32%) for
Reinjection/Fuel Gas, 1.3bscfd (16%) was supplied to the domestic market
and about 783mmscfd (10%) was flared.
The GMD stated that out of the 1.3bscfd supplied to the domestic market,
an average of 71mmscfd went to the Power Sector, while 470mmscfd was
supplied to the Industries and the balance of 69mmscf delivered to the
West African Market through the West African Gas Pipeline (WAGP).
Baru said NNPC would bridge the medium-term domestic gas supply deficit by
2020 through the corporation’s Seven Critical Gas Development Projects
(&CGDPS), adding that a reputable Project Management consulting firm is
collaborating with an NNPC team to achieve accelerated implementation of
the projects.
He assured that full implementation of the project would boost domestic
gas supply from about 1.5bscf/d to 5bscf/d by 2020, with a corresponding
500 per cent increase in power generation and stimulation of gas-based
industrialization.
Baru said all existing power plants in the country now had a permanent gas
supply pipeline infrastructure, even as he stressed that the corporation
would continue to expand and integrate its gas pipeline network system to
meet increasing domestic gas demand.
He listed key gas pipeline infrastructure projects on which, he noted,
significant progress had been made in their execution to include:
Escravos-Lagos Pipeline System (ELPS II), Obiafu/Obrikom-Oben (OB3),
Odidi-Warri Expansion Pipeline (OWEP), Trans Nigeria Pipeline Project
(TNGP) – Ajaokuta-Kaduan-Kano (AKK) Pipeline, Trans Nigeria Pipeline
Project (TNGP) and Nigeria-Morocco Gas Pipeline (NGMP) Project.
In the Midstream Refinery Sub-sector, Dr. Baru regretted that the nation’s
three refineries had not undergone Turn Around Maintenance (TAM) for an
aggregate of 42 years combined.
Despite the challenge, he explained that major rehabilitation works were
carried out in all the three refineries, saying, WRPC has its Distribution
Control System (DCS) successfully upgraded, PHRC had major interventions
in Fluid Catalytic Cracking Unit (FCCU) and Power Plant Unit (PPU) fixed,
while KRPC was undergoing major repairs of its FCCU, Catalytic Reforming
Unit (CRU) and Crude Distillation Unit 2 (CDU2).
He noted that efforts were afoot to get the original builders of the
refineries to carry out TAM on them after securing favourable private
funding for the exercise.
In the Downstream Sector, Dr. Baru noted that even though 2018 was riddled
with some supply shortages, he was delighted that the corporation rose to
the occasion with the support of President Muhammadu Buhari and the
resilience and hard work of NNPC staff, saying as at today, there is fuel
availability in the nook and cranny of the country.
“…It gladdens my heart to hear the positive comments made by motorists and
filling-station owners during my routine checks on some filling stations
at the eve of Chrismas”, Dr. Baru stated.
The GMD disclosed that NNPC imported a total of 15,874,734.82 MT of
Premium Motor Spirit (PMS) otherwise called petrol through the DSDP and
the NFSF arrangement in 2018, representing 62% increase over the 2017
supplies of 9,807,264.61MT, saying that as at today, the national oil
company has 2.98 Billion litres, equivalent to over 59 days sufficiency at
50 Million litres daily evacuation rate.
He said the corporation’s depots had been resuscitated and put to use
through decanting of over 140 Million litres of PMS nationwide, explaining
that systems 2B and 2E pipelines supplying petroleum products to South
West, South-South and South East Regions have been resuscitated.
GMD assured that NNPC was on track in respect of the corporation’s Twelve
(12) key Business Focus Areas (BUFA), and the vision of President Buhari
to improving the status of oil and gas infrastructure through ensuring
products availability to support national economic recovery and growth.
He lauded the contribution of the corporation’s Downstream outfit, NNPC
retail, saying it played a significant role in ensuring continuous supply
of petroleum products to Nigerians through its Mega, Affiliates and Leased
stations.
Baru touted the company’s sale of 1.2 billion litres of petroleum products
in 2018 as against 1.1 billion litres in 2017, representing a 7% increase.
He said the feat was achieved through an addition of 40 new Affiliate and
Leased stations, which he said, brought the company’s network to 618
stations nationwide.
He enthused NNPC Retail had transformed from loss making to profitability.
“We are currently planning for a better performance and achievement in
2019 especially with the continuous innovations and creativity in the
downstream sector and the performance bond signed by all the relevant
heads of our operating units. Continuous improvement as one of the
principles of World Class Organizations is going to remain our key word
in 2019. 2018 was empirically better than 2017, we believe, plan and
strive to achieve a better performance come 2019, by God’s Grace”, Baru
concluded in his end-of-year statement.