NNPCL rejects Senate’s move to increase oil production benchmark

The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, on Friday,  rejected the Senate Committee on Appropriation’s attempt to raise the crude oil production benchmark in the 2024 Appropriation Bill from 1.7 million barrels per day to 1.8 million barrels per day. The suggestion was dropped by Solomon Olamilekan Adeola, the Chairman of the Senate Committee on Appropriation, during the budget defense session with the NNPCL management.

While the Federal Government set an average crude oil production benchmark of 1.78 million barrels per day and a crude oil price benchmark of $77.96 in the Appropriation Bill, Kyari insisted that the NNPCL would adhere to the benchmark approved by President Bola Ahmed Tinubu. He emphasized that the crude oil price and production benchmarks were based on global oil market dynamics.

Kyari urged the committee to stick to President Tinubu’s submission, stating that it is unrealistic to expect crude oil prices to fall below $70. He emphasized that sustained demand for crude oil is expected as economies grow. Despite acknowledging the realistic estimates by President Tinubu, Kyari cautioned that security challenges in the Niger Delta Region, particularly crude oil theft, could impact the federal government’s projections.

The NNPCL GCEO highlighted the alarming issue of illegal crude oil bunkering, revealing over 4,800 illegal connections on crude oil pipelines. Senator Benson Konbowei expressed concern about the situation and mentioned his ability, like other Niger Deltans, to distil oil.

Kyari described the security situation in the Niger Delta as a calamity and emphasized the abnormal engagement of non-state actors to protect critical assets like oil pipelines. He reported positive results in responding to these challenges, with daily oil production increasing from less than 1.2 million barrels in July 2022 to 1.5 million barrels per day in the last two to three months.

Providing an update on refinery maintenance, Kyari stated that the Port Harcourt refineries would resume operations in December, the Warri Refinery in the first quarter of 2024, and the Kaduna Refinery by December 2024. He clarified that the 1.78 million barrels per day oil production for the 2024 budget includes condensate ranging from 200,000 to 300,000 barrels per day.

In conclusion, Senator Adeola, the Chairman of the Committee, commended Kyari for strengthening their confidence in the workability of the assumptions and projections in the 2024 budgetary proposals.