Nigeria plans to pump 4 million barrels of crude oil a day by 2025 and increase refining capacity to 1.5 million barrels daily, a move to revive its previous pledges that turned out to be too ambitious.
According to the Chief executive of the state-run oil firm Maikanti Baru, “Nigeria needs to unlock new barrels as quickly as possible.”
The Nigerian National Petroleum Corporation (NNPC) chief said the state-oil giant will work with private investors to achieve the increase capacity in the sector.
Africa’s biggest oil producer pumps 2.2 million barrels a day and previously set a 4-million target for 2010, before successively delaying it.
The West African country, where output peaked near 2.5 million barrels a day in the middle of the last decade, has grappled with militant attacks, leakages and theft at its oil installations.
Baru said part of the additional refining capacity would come from a 650,000 barrel-a-day complex being built in Lagos by Aliko Dangote, Africa’s richest person.
NNPC, which pumps crude from the country’s fields in partnership with international oil companies (IOC) like Royal Dutch Shell Plc and Exxon Mobil Corp., returned to profit in 2018 after reporting losses in at least the three previous years, according to statements on its website. That was mainly due to the strong performance of its oil and gas production unit. Its refineries had a $365 million operating loss.
“Targets such as these are not new to NNPC,” said Cheta Nwanze, an analyst at Lagos-based SBM Intelligence. “Nigeria has not met a single production target for at least a decade now, in many cases because of security concerns.”
“The desperate need for an improvement in local refining capacity has been obvious for decades,” Nwanze said. The 2025 plan is “extremely optimistic.”
Nigeria also wants to be self-reliant in meeting its fuel demand and cut imports that put a strain on foreign reserves. Oil Minister Emmanuel Ibe Kachikwu told the BBC in 2017 that he’d step down if the country doesn’t achieve that goal by the end of this year. The target is likely to be missed as the four state-owned refineries struggle to fully utilize their combined 445,000 barrel-a-day capacity following years of neglect and mismanagement.
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