By DAYO ADESULU
Federal Government Unveils Ambitious Strategy to Revitalize the Oil Sector
The Federal Government of Nigeria has announced an ambitious plan to boost the nation’s crude oil production by one million barrels per day within the next 12 to 24 months. This initiative seeks to address critical challenges plaguing the oil sector, including oil theft, pipeline vandalism, outdated infrastructure, and the need to attract investment.
Recent Decline in Oil Production
According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), crude oil production fell from 1.571 million barrels per day in August to 1.544 million barrels per day in September, marking a decline of 1.68%. Despite this setback, the government’s new initiative aims to restore and enhance production through a series of targeted interventions.
Launch of “Project 1MMBPD”
During the launch of “Project 1MMBPD,” commemorating NUPRC’s three-year anniversary, President Bola Ahmed Tinubu, represented by the Secretary to the Government of the Federation, Senator George Akume, highlighted the importance of increasing oil production for boosting national revenue and accelerating economic growth.
President Tinubu stated, “Project one million barrels per day is a giant step forward for our oil and gas industry, designed to grow sustainably. By enhancing domestic energy security and supporting economic vibrancy, this initiative will ensure Nigeria remains a crucial player in the global energy landscape.”
Calls for Higher Production Targets
Senator Heineken Lokpobiri, the Minister of State for Petroleum Resources (Oil), emphasized that the current target of one million barrels per day is merely a starting point. He encouraged industry stakeholders to strive for higher production goals, suggesting, “For a country that once produced over two million barrels per day, the present additional one million target is unacceptable. We should be aiming for 2.5 million in the short term and four million barrels per day in the long term.”
Regulatory Developments and Divestment Approvals
In his address, NUPRC Commission Chief Executive Engr. Gbenga Komolafe announced the government’s decision to block Shell’s $2.4 billion divestment of its onshore and shallow water assets to the local consortium Renaissance. However, four other divestment deals received government approval, including ExxonMobil’s sale of Mobil Producing Nigeria Unlimited to Seplat Energy.
“Out of the five divestment applications received by the Commission, four passed the regulatory test and secured ministerial consent,” Komolafe confirmed. The approved transactions include Equinor Nigeria Energy’s sale to Project Odinmin Investments, Nigerian Agip Oil Company’s sale to Oando Petroleum, and TotalEnergies EP Nigeria Limited’s sale to Telema Energies Nigeria.
Addressing Infrastructure Challenges
Mallam Mele Kyari, Group CEO of NNPC Limited, highlighted aging infrastructure and pipeline vandalism as significant barriers to increasing production. “We are dealing with infrastructures that are over 50 years old. Without replacing these, you cannot evacuate the additional one million barrels of oil, especially from onshore assets,” he stated.
Urgent Need for Modernization
Tony Elumelu, Chairman of UBA Group, echoed the need for modernization, warning that Nigeria’s oil production has been declining, dropping from over two million barrels per day to below 1.5 million. Elumelu stressed that outdated infrastructure, regulatory uncertainties, and security challenges in the Niger Delta are undermining the oil sector and the economy as a whole.
“As a nation, we cannot permit this decline to continue. We must modernize our oil and gas infrastructure to safeguard our economy and ensure prosperity for future generations,” he urged.
Conclusion
As Nigeria embarks on this ambitious plan to increase crude oil production, the success of “Project 1MMBPD” will depend on addressing the underlying challenges and modernizing the sector. The commitment from government officials and industry leaders signals a proactive approach to revitalizing Nigeria’s oil industry and enhancing its economic prospects.