NNPC Describes How Crude Oil Production Increased To 1.6 Million BPD

The Nigerian National Petroleum Company (NNPC) Limited confirmed on Wednesday that Nigeria's oil output had reached 1.6 million barrels per day (mbpd) with the resumption of Forcados and partial repair of the Trans Niger Pipeline (TNP).

The national oil firm was able to increase crude oil production, which had dropped dramatically, thanks to the cooperation of the security services, authorities, oil-producing regions, and other stakeholders, according to NNPC.

Chief Upstream Investment Officer of the NNPC Upstream Investment Management Services (NUIMS), Bala Wunti confirmed the widely reported 700,000 barrels per day losses the national oil business sustained while speaking on Arise News Channel.

According to all the figures, Nigeria was losing, on average, more than 700,000 barrels every day, Wunti said.

He clarified that in hydrocarbon accounting, the figure includes engineering losses, oil theft, as well as what would have been produced as a result of shutdowns, which he defined as opportunity losses.

According to him, Nigeria was losing up to $1.9 billion per 30 days and up to 21 million barrels per month prior to the recent rebound.

“If you take an average oil price of $90, that will translate to somewhere in the neighbourhood of $1.9 billion losses that we suffered,” he said.

Since the relaunched campaign against crude oil theft, at least 68 vessels have been confiscated, according to Wunti, who added that some of the offenders are currently facing legal action.

In addition to Brass and Bonny, which had been shut down owing to force majeure, he claimed that Forcados had returned thanks to cooperation between the security services, neighbourhood contractors, and the NNPC.

He emphasised that although the Trans Niger Pipeline (TNP) had not yet been entirely restored, it had now been partially done so, which was the cause of the rise in reported output numbers.

“Forcados is back, Bonny will soon be back,” he assured.

Until recently, Wunti claimed that the sector was deploying technology in an inefficient way, making it exceedingly challenging to have end-to-end insight into NNPC's infrastructure.

Wunti said that there is now an increase in production of between 350,000 and 400,000 barrels per day (bpd), adding that Nigeria currently drills about 1.6 million bpd.

He asserts that NNPC can now view all of its assets in detail from beginning to end, and that of the unlawful refineries that were discovered, 70% have been shut down.

“It is just mind-boggling what we have discovered and we could see the level of sophistication where illegal connections were put on our trunk lines,” he stated, describing it as a very complex situation.

He said that the nation's oil infrastructure was protected by multiple levels of security, adding that each level is now watched over by lower levels to prevent shady activity.

THISDAY learned that as of the third quarter of 2022, the production decrease has reduced the percentage of foreign exchange earnings from crude oil export from 90%, when output was high, to 78.5%.

As crude theft escalated, the federal government hired certain private security companies, including Pipeline Infrastructure Nigeria Limited (PINL), Maton Engineering Limited, and Tantita Securities Service, which is owned by Government Ekpemupolo, also known as Tompolo.

“The new security architecture relies on technology. What it does is to bring together the security and intelligence agencies on one table, the regulators on the other, and then bring in the community into the other angle and without the community, we can’t achieve that.

“Today, we are able to detect and we able to respond. The success that we recorded is essential because of this improved security situation.

"We are now almost at an average of 350,000 to 400,000 bpd increase. At a certain level, we recorded up to 450,000 bpd increase.

“That is why you can see we are now from 1.1 million bpd daily to about 1.59 million bpd as at this morning (yesterday).

"So, these are some of the things that we are able to record based on the new security architecture.”

He gave his word that the combined effort of private and public securities would result in further improvement in crude oil output, which would then reflect in the country's earnings in foreign exchange.

He claims that as the security architecture is institutionalised, 638 out of the 763 illegal refineries have currently been dismantled.

“We have incapacitated almost about 70 per cent of what we have identified and we will keep identifying some of them.

"It is mind-boggling what we discovered even as operators and every one of us saw the kind of sophistication, where illegal connections are put on every major trunk line, including direct export lines on Forcados.

“It couldn’t have been possible without the collective resolve of the private security guards anchored by the communities.

"We have short to medium and long-term visibility. I can tell you we have succeeded to an extent to stop this menace.

“The question now is how to stop its growth. That is why we introduced checking the checker. What that means is that we have four layers of visibility.”

Wunti also said persons arrested in connection with the criminal oil theft and bunkering activities were currently being prosecuted.

He said in due course, their identities would be disclosed to the surprise of Nigerians.

"And the new security architecture was anchored on basically on rectangular architecture layered on technology.

"It brings together the security and intelligence agency at one angle, the regulators at another angle, the operators at another angle, and then bring in what was almost zero – the community – into the other angle, and without the community, you can’t achieve that.

“That is just the innovation and we layered it on a technology – Command and Control Centre.

"I’m glad this media house has visited that Command and Control Centre.

"Today, we have end-to-end visibility, we are able to detect, we are able to deter and we are able to respond.

“We are still making a lot of improvement and that’s what you call the 3DR: we first detect, we deactivate, and we destroy and then we remove.”

Wunti noted that the country's present gasoline shortage is the result of problems with the product distribution system and that the supply is not the cause of the value chain disruption.

He clarified that the 4As—making available, inexpensive, accessible, and in an acceptable format—were the foundation for making any product available.

The difficulty in Nigeria has traditionally centred more on distribution than supply, he noted, adding that ensuring product security depended on supply, distribution, and retail.

He said there were about two billion litres of petrol in stock, saying the volume would only make an impact on the people if all of it were sent to filling stations.

“Needless to say, 60 to 65 per cent of the country source their product from Lagos.

"At the last count, we only have 35,000 trucks. That 35,000 crisscross this country.

"They go to Maiduguri, Sokoto, Calabar and the rate at which they make their turnaround has changed significantly from one week to 10 days.

"Now, they hardly do once in a month. That brought about several constraints.

“We all know what the problem was in the last supply disruption.

"Around Apapa axis, there was a blockage. No truck loaded can leave and that created a problem.

"If you stay one day without delivering product to Lagos, you need a minimum of one week to supply at a higher rate to address that.

“If you waste two days, it will take you almost three weeks to close the gap and if you waste three days, it will take you one month. That is the problem.

“Even as of today, we have about two billion litres. That two billion litres are supposed to be in our stock, in our depots, either NNPC or other private depots.

"What constitutes these two billion litres is what you have in the marine and what you have in the stock, in the depots.

"But your ability to take these two billion litres to the stations is where the problem lies.”

He added that Nigerians will have enough fuel to last them through the holiday season while assuring that all parties involved were working around the clock to find a solution.