The Nigerian National Petroleum Company Limited (NNPCL) 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 Group Chief Executive Officer of NNPCL, Mele Kyari, kicked against the plan during an interactive session with the Senate Committee on Appropriations in Abuja on Friday.
The Chairman of the Committee, Senator Solomon Adeola (APC – Ogun West), made the proposal when the NNPCL management led by Kyari appeared before the panel.
The Federal Government in the Appropriation Bill had pegged average crude oil production at 1.78mbpd and crude oil price benchmark of $77.96 for the 2024 fiscal year.
However, NNPCL GCEO told the Committee to stick to the benchmark proposed by President Tinubu in the 2024 Appropriation Bill.
Kyari insisted that the crude oil price and production benchmarks were based on dynamics in the global oil market.
The NNPCL boss said the oil component of the budgetary projections are realistic and realisable despite the fact that the country presently produces average of 1.5million barrels of oil per day.
He said: “On the question around whether we adjust the oil production benchmark from 1.78mbpd to 1.8million, I still advise that we stay in the submissions by Mr. President.
“There is no way we will get crude oil 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 is 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 is realistic. There is no curtailment on condensates from OPEC.”
Supporting his stance on realistic estimates by President Tinubu, Kyari however warned that security challenge in the Niger Delta Region could frustrate the projections of the Federal Government, citing crude oil theft.
The NNPCL GCEO also told Senators that illegal crude oil bunkering in the oil producing states are alarming as he revealed that there are over 4,800 illegal connections on crude oil pipelines.
“The situation we have in Niger Delta in terms of security is a calamity. We don’t have that anywhere in the world. To engage non-state actors as last resort as solution is abnormal.
“But we have to respond abnormally. You have over 4,800 illegal connections on our pipelines. That means, within every kilometer, you have an insertion.
“Even if you seal all the insertions, you can’t get what you want in terms of production.
“In the Niger Delta, people are coming from all parts of the country to do illegal refining. That’s why we engage locals to deal with it.
“We will contain this challenge. We are doing everything possible to restore sanity. What is happening is a colossal damage to the environment and the host communities.”
Kyari also gave an update on the Turn Around Maintenance (TAM) of the nation four refineries.
He insisted that the Port Harcourt refinery would come on stream in December 2023 while Warri Refinery would resume production in the first quarter of 2024.
The NNPCL GCEO gave December 2024 as production target of the Kaduna Refinery.
The Senators frowned at the N406 billion to Federation Account as dividend between July to November from the NNPCL as they dismissed it as nothing to cheer about.
The lawmakers tasked the management of the oil giant to strive to be like its global peers, citing Saudi Aramco and the Petrobas of Brazil.
