A Review of the Nigerian Energy Industry

Nigeria’s oil ouput peaks at 2.48m bpd – Oniwon

Clara Nwachukwu

14 June 2012, Sweetcrude, VIENNA – NIGERIA’s crude oil production, which suffered in the recent past on account of militancy and restiveness in the oil rich Niger Delta, has risen significantly to peak at 2.48 million barrels per day, bpd, as at Wednesdayy, the Nigerian National Petroleum Corporation, NNPC, has said.

About 700,000bpd come from deep offshore productions, while the balance is from traditional onshore fields, with more volumes expected over the next couple of months, particularly from the abandoned locations.

Group Managing Director, NNPC, Mr Austen Oniwon, who revealed this to our correspondent on the sidelines of the 5th OPEC International Seminar, which opened in Vienna, Austria, noted that current production was way ahead of the 1.4 and 1.5 million bpd the country tried to maintain at the height of militancy.

Accordingly, Oniwon insisted that there was no fear ofNigerianot being able to meet its membership quota allocation from the Organisation of the Petroleum Exporting Countries, OPEC, as more than ever,Nigeriawas in a good position to meet its quota.

He said: “As at today, at 2.48 million bpd, which is far, far away from the period when we were doing 1.4/1.5million during the militancy period, there is no question about not meeting our quota. So I think we are doing well and definitely, we are meeting our quota.”

He argued that fears expressed over the country’s ability to meet its OPEC quota on account of current security challenges are over exaggerated, saying, “I think we should not over hype the insecurity issue in Nigeria, the production has gone up and a lot of production is coming from the deep offshore.

“As of today, we are doing over 700,000 bpd from offshore locations, while we are trying to bring back all the land locations that were abandoned and destroyed during the militancy period.”

PIB and oil contractsOniwon noted that government’s resolve to maximize its hydrocarbon resources was the reason it was trying to tweak existing oil laws through the Petroleum Industry Bill, PIB, to maximize relationships with the International Oil Companies, IOCs.

He said: “We are going on pretty well because we always benchmark ourselves with the rest of the world, and we see that in most of the contracts that we signed with the IOCs, based on the benchmarks, we are not doing very badly. However, there is a lot of room for improvements, and that is one of the targets of the PIB to correct some of these.”

Investment in alternative sourcesWith regard to speculations on whetherNigeriawill join theUnited Statesand some other developed countries in the investment and development of shale gas and shale oil, the NNPC boss said there was no plan towards this at this point in time.

This, he explained, was because “the Nigerian geological survey has not proven much for shale hydrocarbon, but we have not discountenanced that it won’t happen in the future.”

For now, he said government was more concerned with the development of its natural gas resources, and recalled that this was one of the reasons the Gas Revolution was launched by the President two years ago.

“It (gas revolution), is looking at what the future holds in the world energy mix because gas is going to become more and more dominant, and Nigeria is positioning itself for it. Luckily for us, we are very well endowed with natural gas inNigeria.”

Nigeria’s gas resource is estimated at 187 trillion standard cubic feet, TSCF, discovered and another 600 tscf undiscovered potential.

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