Lagos — The Nigerian National Petroleum Corporation, NNPC has said it would now focus on production of more condensates.
Group Managing Director of the Corporation, Mallam Mele Kyari while speaking during a Seplat-organised webinar last week, said Nigeria’s target is to produce more of condensates as the country is still committed to the OPEC cuts.
Condensates refer broadly to any type of oil that “condenses” into a liquid after being freed from high-pressure wells, where it often lurks in gas form, or separated from gas. But once it becomes a liquid, there is no agreed way to tell condensate from ordinary crude.
The ongoing cuts by the Organisation for the Petroleum Exporting Countries, OPEC and its non-OPEC partners allow Nigeria production of 1.7 million barrels per day as against an output of between 2.2-2.4 million barrels in existence before the agreement.
Explaining further, Mallam Kyari said although the NNPC targets production of 3 million barrels per day however, current market volatility puts such prospects at risk.
“The market can’t take all of our production at the moment,” he said referring to how low demand had stiffened market competition leading to a drop in price of crude oil.
“There is tighter competition out there, the world, as well as Nigeria, can’t sell its oil so no need to produce what we can’t sell and end up flooding the market with it,” he added.
International Brent as at 10:30 am Nigeria time on Monday sold at $43:05 per barrel after a previous closing of $43:32. OPEC basket price rested at $43:02 while the WTI sold for $40:39 per barrel.
Kyari said NNPC has just two major focuses for the year, which he listed as bringing down production cost to $10 per barrel, and creating batter market conditions for more gas production.
“NNPC is focused on bringing down the cost of production. No need to operate where you can’t produce because there is no room for subsidy anymore”.
“…and we are currently putting down structures and facilities to attract gas investors because we believe this season is for gas,” he said.