Nigeria is in talks with French oil giant Total on the Preowei oil field that is next to the Egina project, and is hoping to secure a final investment decision on Preowei next year.
A final decision on Shell’s Bonga Southwest could come by the end of this year and both these projects could add at least 200,000 barrels of oil a day combined, says Mele Kyari, new Managing Director of the national petroleum corporation, NNPC.
According to him, Nigeria can easily boost its oil production next year to at least 2.5 million barrels a day, according to the newly appointed head of the state oil company.
“We can easily hit 2.5 million barrels a day in one year,” Kyari said in Abuja, the capital. “We can pull back the 300,000 barrels a day shut-in without doing anything significant,” he said in an interview with Bloomberg in Abuja, referring to stranded supply.
Nigeria which currently produces around 2.3m barrels daily including 350,000 barrels in condensates, has seen output gradually rising since the middle of the decade when disruption caused by a campaign of militant attacks drew to an end. While theft and sabotage remain an issue, Kyari outlined a plan to raise oil production to 3 million barrels a day and boost reserves to 40 billion barrels within four years.
“Security is still a concern and we are addressing that,” Kyari said. Levels of theft have “gone down significantly but it is there,” he said, declining to give a figure for volume of crude lost to thieves.
A government committee that works on the issue pegs the figure at about 120,000 barrels a day in the first half of this year, according to Governor Godwin Obaseki, chairman of that group.
NNPC, which pumps about 80% of Nigeria’s crude in partnership with producers like Royal Dutch Shell Plc, Exxon Mobil Corp., Chevron Corp., Total SAand Eni SpA, has set a deadline of the first half of 2021 to clear all outstanding debts related to operating costs owed to its partners, Kyari said.
Nigeria has paid $3.8 billion of a $5.1 billionsettlementto majors. That leaves about $1.3 billion yet to clear.
“As we are extinguishing the legacy costs, we are meeting our current obligation. That’s the plan and that’s why our partners are going back to exploration,” he said.
