The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, has rejected the move by the Senate Committee on Appropriation to increase the crude oil production benchmark in the 2024 Appropriation Bill from 1.7 million barrels per day to 1.8 mb/d.
The Chairman, Senate Committee on Appropriation, Solomon Adeola, had given the suggestion during the budget defence session between his committee and the management of the NNPCL.
The Federal Government, in the Appropriation Bill, gave an average crude oil production benchmark of 1.78 mb/d, and a crude oil price benchmark of $77.96.
The NNPCL GCEO told the committee that the oil giant would stick to the benchmark approved by President Bola Tinubu in the Appropriation Bill.
Kyari submitted that the crude oil price and production benchmarks were based on dynamics in the global oil market.
He said, “I will advise that we stick to the submission of Mr President on the quota. There is no way we will get crude oil (for) less than $70.
“Once economies are growing, there will be sustained demands for crude oil in our country and other countries.
“The estimates supplied by Mr President are realistic. When we say production, we mean total production of crude oil and condensates.
“So we combine condensates and crude oil as total marginal production. So we know our estimates are realistic. There is no curtailment on condensates from OPEC.”
Reinforcing his stance on realistic estimates by Tinubu, Kyari, however, cautioned that security challenges in the Niger Delta region could frustrate the projections of the Federal Government, citing crude oil theft.
The NNPCL GCEO told the gathering of lawmakers and journalists that illegal crude oil bunkering in the oil-producing states is alarming as he revealed that there were over 4,800 illegal connections on crude oil pipelines.
Kyari, while responding to the comments by a Peoples Democratic Party lawmaker representing Bayelsa Central, Benson Konbowei, who said he, like every other person from the Niger Delta, could distill oil, said, “The situation we have in (the) Niger Delta in terms of security is a calamity.
“We don’t have that anywhere in the world. As it is today, about 4,800 illegal connections are made on the over 5,000 oil pipelines across the country.
“The illegal connections on oil pipelines in the Niger Delta is so rampant that within 100 kilometres of the affected pipelines, 300 insertions are made on them, which eventually made the pipe to be weak to the point of not being able to hold the pressure of oil pumped, let alone, delivering it to the targeted destination.
“Additionally, it is abnormal to engage non-state actors to protect critical assets like oil pipelines. We have, however, responded abnormally and are getting results, because unlike as it was in July 2022 when less than 1.2 million barrels of oil were produced per day, it has been 1.5 million barrels per day within the last two to three months.”
Kyari also gave an update on the turnaround maintenance of the nation’s four refineries, insisting that the Port Harcourt refineries would come on stream in December while the Warri Refinery would resume production in the first quarter of 2024.
The NNPCL GCEO gave December 2024 as the production target of the Kaduna Refinery.
He also informed the committee members that the 1.78 mbp/d oil production for the 2024 budget, included condensate which was 200,000 to 300,000 barrels bp/d.
Reacting, Senator Adeola, said Kyari had strengthened the committee’s convictions on the workability of the assumptions and projections of the 2024 budgetary proposals.