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Video: NNPC highlights week with 40bn barrels crude oil reserve target



Video: NNPC highlights week with 40bn barrels crude oil reserve target

By Edith Ike-Eboh and Emmanuel Afonne

The Nigerian National Petroleum Corporation (NNPC) started the week with good news from the federal government that it aimed to increase the country’s oil reserves to 40 billion barrels and four million barrels of production capacity per day.

President Muhammadu Buhari, who said so at the opening of the 4th Nigeria International Petroleum Summit (NIPS) in Abuja, reiterated the government’s determination to increase the country’s crude oil reserves in a few years.

Buhari, represented by the Minister of State for Petroleum Resources, Chief Timipre Sylva, said the FG intends to achieve the growth of crude oil reserves through the marginal oil fields commanded by the NNPC.

The president said the build-up would be achieved despite Nigeria now producing 1.7 million barrels per day in line with the Organization of the Petroleum Exporting Countries (OPEC) Plus production quota.

“My administration has demonstrated its commitment to reshaping the oil and gas industry.

“The ambitious goal of increasing crude oil production to at least 4.0 million barrels per day and building a reserve of 40 billion barrels remains sacrosanct and the guiding principle of our overall outlook for the industry. .

“Creating a business environment conducive to the prosperity of the hydrocarbon industry is no longer a choice; it is a necessity.

According to him, the theme of the summit “From crisis to opportunities – New approaches for the future of hydrocarbons”, reflects the need to adopt new approaches for the future of hydrocarbons by redefining the objectives and paving the way for the rediscovery.

He said governments around the world were now more focused on managing the COVID-19 pandemic and its impact on economies than on the quest for the energy transition.

The president declared: “However, the energy transition is real, renewable technologies are less and less expensive and investors are more and more aware of environmental issues, and are starting to turn their backs on investments in hydrocarbons.

“Experts have predicted that around 80% of the global energy mix in 2040 will still come from hydrocarbons.

The President further noted that Nigeria needs to seize short term opportunities, using existing technology which can extend the life of mature fields.

Senate Speaker Ahmad Lawan, who was also present, said the National Assembly would pass the much-anticipated Petroleum Industry Bill (PIB) before the end of June.

He noted that the National Assembly’s Ninth Legislative Program for 2019-2023 aimed to support the efforts of the executive branch to deliver a GDP that would offer a win-win scenario for Nigeria and investors.

Speaker of the House of Representatives, Femi Gbajiabiamila, Secretary General of OPEC, Dr Mohammed Sanusi Barkindo, Secretary General of the Forum of Gas Exporting Countries (GECF), His Excellency, Yury Sentyurin, as well as Dr Omar Farouk Ibrahim, Secretary- The General of the African Petroleum Producers Organization (APPO) also spoke at the event.

Also on NIPS, the NNPC unveiled its intention to diversify its investment portfolio with the aim of transforming itself into an international energy company, far from a traditional oil and gas company.

The group chief executive of NNPC said the company is considering a name change to reflect its plan to diversify into renewable energy and non-oil and gas assets such as healthcare, research, technology, innovation, telecommunications and real estate.

Kyari also said the company is working to maximize exploration and exploitation of the country’s huge hydrocarbon resources before oil and gas become economically unnecessary like coal.

The GMD asserted that the Nigerian government was determined to create the right laws and policies to support investment and growth through the adoption of GDP, stressing the need to launch an urgent exploration campaign as production oil in sub-Saharan Africa would almost be depleted. by 2050.

According to Kyari, Nigeria holds around 36.9 billion barrels of oil and 203 trillion cubic feet of gas reserves, which he says represents 60% and 78% of oil and gas reserves in sub-Saharan Africa, respectively. .

He said Nigeria remains focused on increasing the supply and use of domestic gas to power power generation and industries as part of the federal government’s aspirations for the “gas decade”.

Regarding emerging opportunities in Africa, Kyari said that the relatively less explored countries of West and East Africa present opportunities like the next frontiers of exploration, noting that new provinces with transformation margin include Sierra Leone, Ghana, Uganda, Kenya and Mozambique.

He hinted that the NNPC would declare a dividend for its shareholders when the 2020 audited financial statements were released.

He said the Company’s commitment to transparency and accountability has paid off, as it has opened doors for financing where others struggle to obtain loans.

Also during the week, the Nigerian Senate commended the NNPC for its efforts to enhance transparency and eliminate corruption from its system.

The commendation was made by the chairman of the Senate Anti-Corruption and Financial Crimes Committee, Senator Suleiman Kwari, during a hearing in Abuja to assess the level of implementation of the national anti-corruption strategy. corruption by government and parastatal agencies.

Kwari said it was heartwarming that the NNPC was making great strides towards profitability and urged the company to maintain the gains made so far for the good of the country.

The NNPC GMD, during its presentation, said that the Company, as part of its commitment to the war on corruption, has put in place processes and structures that will ensure transparency and accountability.

He said the Company, working with security agencies, had reduced the incidence of vandalism on pipelines nationwide to four percent.

He, however, denounced the increase in smuggling of petroleum products, which he said has become a national challenge that must be addressed urgently to stem the enormous loss suffered by the nation.

Also during the week under review, the NNPC recorded more than 1 million euros thanks to the monetization of its carbon credit as part of its Joint Venture partnership with TotalEnergies.

The group’s chief executive, National Petroleum Investment Management Services (NAPIMS), Mr. Bala Wunti, who revealed this on the sidelines of the recently concluded NIPS in Abuja, spoke about the benefits of a carbon credit.

Wunti described the carbon credit as a permit that allows a country or organization to produce a certain amount of carbon emissions that can be traded or converted to cash if the full allowances are not used.

He said the positive carbon credit that has been converted to over € 1million is an additional revenue entry that could be replicated in the emerging energy transition scenario.

Wunti explained that the transition to renewables has led to a lack of investment in hydrocarbons by IOCs, which could lead to a shortage of supply in the future if not properly managed.

He also identified the delay in the passage of the Petroleum Industry Bill (GDP), safety and the high cost of operation as obstacles to the competitiveness of Nigeria’s oil and gas industry.

He said embracing GDP, improving collaboration among industry stakeholders to tackle insecurity as well as reducing the cost of producing crude oil to $ 10 a barrel would make Nigeria a leading investment destination.

Also this week, the NNPC called on international oil companies operating in Nigeria to invest in the downstream sector to boost product availability and sustainable growth in the oil and gas industry.

Group Managing Director, Crude Oil Marketing Division Billy Okoye, who also spoke on the sidelines of NIPS in Abuja, praised the private companies that are currently investing in the country’s refineries.

He said the cost optimization program was essential for a successful energy transition, as funds would be released to invest in renewable energy and gas optimization projects.

In conclusion, the NNPC congratulated the President of the Nigerian Publishers Guild (NGE), Mr. Mustapha Isa, on his re-election as President of the Guild.

Kyari, in a congratulatory letter, said Isa’s re-election did not surprise him.

He said his re-election was a reaffirmation of his integrity, dedication, work ethic and outstanding contributions to the Guild, urging him to take the guild to greater heights in his second term.

It will be recalled that Isa was re-elected at the 2021 Biennial Congress of the Guild which was recently held in Kano.

In the global market, oil prices rose for a second session on signs of strong fuel demand in Western economies, while the prospect of a return to Iranian supplies faded as Secretary of State for The state of the United States of America has said that sanctions against Tehran are unlikely to be lifted.

Brent crude futures rose 32 cents, or 0.4% to $ 72.54 a barrel, after hitting $ 72.83, the highest since May 20, 2019, while futures on U.S. West Texas Intermediate (WTI) crude climbed 31 cents, or 0.4% to $ 70.36 a barrel, after hitting $ 70.62, the highest since Oct. 17, 2018.

At the same time, the Market Intelligence Department of the NNPC’s London office said global inventories continued to decline despite recent declines in demand, especially in India, the world’s third largest importer of oil.

The Organization of the Petroleum Exporting Countries (OPEC) plus has shown that it remains under control and will restore stocks to their pre-COVID-19 baselines.

This maintains the offset on the price curve, which is clearly the block’s preferred price structure.

Still, some analysts note that inventories are still high and that speculative pressure in paper markets has turned upward on oil prices, somehow accentuating the backlash despite evidence of a large and resilient oversupply. .

Once the current reduction phase is completed at the end of July, producers will still keep around 5.8 million barrels of production per day offline, according to Energy Intelligence reports.

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