TheCable

Mele Kyari, group managing director of the Nigerian National Petroleum Corporation (NNPC), says the country’s oil output will rise to 1.8 million barrels per day (bpd) by the end of 2021.

TheCable had reported that Nigeria lost its spot as Africa’s top oil producer to Libya in the month of October. 

According to data released by the Organisation of the Petroleum Exporting Countries (OPEC), Nigeria’s production declined sharply to 1.35 million barrels per day by 45,000 bpd in October from about 1.40 million bpd in September.

While speaking during an interview with Bloomberg TV on Tuesday, Kyari said oil output would reach 1.8 million barrels a day by December.

He added that it would easily hit 2 million barrels when condensate — a light form of oil — is included in the total.

“It is very obvious that by the close of the year we would get back to the 1.7-1.8m barrels per day from crude only. As you may be aware, when we mention these figures, I am talking about crude oil only,” Kyari said.

“We do produce condensate and when we combine this, we can easily hit the 2.0 million at the end of the year.

“The fact is very clear, during the COVID-19, we shut down some of these wells and they naturally don’t get back when you want them to and how you want them.

“That is what we are trying to do because we do have some challenges around the facilities and these are being taken care of. There is enormous work and intervention going on that will get us back before the end of the year.”

Kyari, however, said that OPEC+ — consisting of the Organisation of the Petroleum Exporting Countries and its allies — would face challenges to quickly pump more oil if a decision was taken to do so.

He said that “may not be very, very realisable” as the finance needed to boost oil production was lacking.

“I’m not sure it’ll be possible to fill the gap” quickly, partly due to a lack of financing for investment in oil fields,” Kyari said.

“Even if we were to move, it probably could be a bit difficult to do that.”

Earlier this month, OPEC+ decided to stick to plans to increase the global oil supply by 400,000 bpd by December.

But Nigeria has continued to perform below the OPEC quota.

Member countries of OPEC+ led by Saudi Arabia and Russia have also resisted calls by the U.S government to ramp up oil output.

This has led the Joe Biden-led US government to consider a release from the nation’s strategic petroleum reserve (SPR) to tackle soaring gasoline prices.

According to Kyari, such a release by the U.S. would likely have a marginal and short-term effect.

“Obviously there has to be significant releases from the SPR for it to make any meaningful change,” the NNPC GMD said.

Kyari said that crude’s likely to stay above $80 a barrel for “a while to come” and $100 is “within sight”.

Several energy executives and leaders, such as Russian President Vladimir Putin, have said that oil prices could reach $100 per barrel amid increasing demand for all energy commodities.