By John Ofikhenua, Abuja
The Federal Government plans to raise the daily oil production from 1.4 million barrels per day (bpd) to four million bpd, President Muhammadu Buhari hinted on Monday.
Nigeria, which has daily capacity to produce 2.5 barrels, produces 1.4 million barrels due to the Organisation of Oil Producing Countries (OPEC) quota.
Speaking at the 4th Edition of the Nigeria International Petroleum Summit in Abuja on Monday, the President also reiterated the government’s determination to build up the nation’s crude oil reserves to 40 billion barrels.
The President was represented by Minister of State for Petroleum Resources, Chief Timipre Sylva.
Speaking on the conference theme “From crisis to opportunities: New concept,” the President said his administration had demonstrated commitment to overhaul the oil and gas industry.
He said: “The ambitious goal of ramping up crude oil production to at least 4.0 million barrels per day and building a reserve of 40 billion barrels remains sacrosanct and guiding principle to our overall outlook for the industry, creating the conducive business environment for hydrocarbon industry to thrive, is no longer a choice. It is a necessity.”
According to him, the theme of the summit reflected the need to adopt new approaches to the future of hydrocarbons by redefining objectives and providing the pathway for rediscovery.
Buhari noted that accelerated and unprecedented demand disruption as well as supply glut that generated crises for the global economy and the oil industry.
Stating that the crises has challenges and opportunities, the President identified hat the global agenda for energy transition that was taking the backseat must be tackled.
He said governments across the world were now more focused on managing the COVID-19 pandemic and its impact on economies than the quest for energy transition.
The President said: “However, energy transition is real, renewable technologies are getting cheaper and investors are increasingly conscious of environmental issues, and are beginning to turn their back on hydrocarbon investments.
“But history has shown that human beings have such appetite for energy, which renewable does not have the capacity to cope with in the foreseeable future.”
According to him, experts have projected that about 80 per cent of the world’s energy mix in 2040 would still come from hydrocarbons.
He noted that fossil fuels would continue to be the source of dozens of petrochemicals, petrochemicals feedstock that companies will transform into versatile and valued materials for modern life.
Buhari said: “Thus, hopefully, the hydrocarbon industry will still remain a multi-trillion dollar industry in the coming decades. For us as a country with a vast hydrocarbon potential, that is an opportunity.
”How we exploit that opportunity is a matter of strategy. Developing that strategy is at the heart of core objective why in 2016, the Federal Executive Council (FEC) of this administration approved the establishment of the Nigeria International Petroleum Summit.”
He urged participants at the summit to come up with strategies and new approaches for the future of hydrocarbon industry and suggest ways restore the industry’s pre-pandemic era performance.
Stressing the importance of lower cost as the future energy, he spoke of the need to drive down production cost per barrel.
He pointed out that given that about 80 per cent of the global energy mix by 2040 will still be hydrocarbon, Nigeria cannot turn its back yet on more exploration, discovery of new fields is thus crucial.
The President said Nigeria must address short-term opportunities, using existing technology that can extend the life of mature fields.
He said: “Nobody should doubt our commitment in this regard, given a bold move to issue new more marginal field licenses, recently.”
Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari cost will shape the future of the oil industry.
Kyari said the COVID-19 pandemic had shown that only the best of producers would survive, noting that cost-control had become a major issue in the industry.
He identified paucity of resources and the overall reluctance by investing companies and banking authorities responsible for the funding problem.
The NNPC boss cited insecurity as a major issue for the corporation’s business, noting that efforts were on across the industry in the Niger Delta and all other locations to protect its facilities.
“We are aware that the significant work has been done, the level of security issues has clearly diminished. But there is still work to be done,” Kyari said.
Urging the companies to strive to be energy firms instead on dishing out solely oil and gas, Kyari said: “You must automate, you must reduce your cost, you must be more efficient. And also you must be more collaborative in our approaches and this has paid off for us. And, and of course in.
“Ultimately, this crisis is surely an opportunity for us to do many things differently and particularly more so in our country to deal where the enormous gas resources can be converted to value, and who can join the journey for blue and green hydrogen.”
OPEC Secretary-General Mohammed Sanusi Barkindo said the Organisation had revised its global economic demand forecast up to 5.5 per cent for the year and the oil demand growth forecast remains at 6 mb/d.
According to him, it should be borne in mind that the majority of this demand is back-loaded to the second half of this year.
He recalled that from 2014 to 2016, world oil supply growth outpaced that of oil demand, with world oil supply growing by 5.8mbd, while world oil demand increased by 4.3mbd.
Speaking virtually, he noted that by July 2016, the Organisation’s commercial stock overhang reached a record high 403mb over the five-year average.
According to him, the OPEC reference basket price fell by an extraordinary 80 per cent between June 2014 and January 2016. Some crude oil benchmarks fell below $10/b.
The OPEC boss noted that investments were choked-off, with exploration and production spending falling by an enormous 25 per cent in both 2015 and 2016; a fall amounting to above $300 billion.
He said: “There were significant job losses across the industry, as well as increasing financial and operational stresses for many companies. In fact, a record number of companies in our industry filed for bankruptcy.
“In terms of foregone revenues to OPEC Member Countries during this oil cycle, collectively about $1 trillion was lost as a consequence of the plunge in prices in 2015 and 2016. No Member Country of OPEC was insulated from such a contraction in oil revenues during this cycle,” Barkindo said.