The Nigerian National Petroleum Corporation (NNPC) has said its aspiration to attain 250,000 barrels of oil per day (bpd) production by 2015 is on.
He said it would government’s policy to unbundle the NNPC as provided in the Petroleum Industry Bill (PIB) now before the National Assembly.
The production target would be achieved through NNPC’s subsidiary in charge of exploration and production (E&P), National Petroleum Development Company (NPDC).
The Group Managing Director of NNPC, Andrew Yakubu, had on assumption of office assured he would ensure aggressive transformation of the corporation and its subsidiaries to be globally competitive and carry out its operations in line with global best practices.
Yakubu during his inaugural town hall meeting with management and staff of the NNPC said the management team under his watch would introduce new business models in all its Strategic Business Units (SBUs) and Corporate Service Units (CSUs) to ensure the commercial viability of the corporation in order to remain competitive in the global oil and gas industry. Yakubu stated that the management team would reposition the NNPC to become a commercially focused and profit-driven organization that is governed by best management practices using current technology, pursue and maintain competitive operational and business efficiency, cost effectiveness, input/output optimization, revenue maximization and profitability.
Before 2010, the NPDC was producing about 65,000bpd but by 2010, the company was given a target to attain 250,000 bpd production by 2015. In compliance with this directive, the company has ever continued to rev up production and currently stands at 130,000 bpd.
According to the NPDC, the bulk of the recent production level is from the oil mining leases (OMLs) assigned to the company following the divestment of by some of the Joint Venture partners such as Shell. This kind of growth was described by the Managing Director of NPDC, Mr. Victor Briggs, as “not being organic,” thus the need for NPDC to commence aggressive drilling programme to grow its production in an organic fashion.
In view of the desire to attain the target, Briggs said the NPDC has activated a plan to drill 40 wells in the next five years, which is an average of eight wells per year. This plan is significant and ambitious considering that through the last five years NPDC drilled only 10 years, an average of two wells per year, he added. He said the aggressive drilling programme has commenced with the drilling of Okono 6 and 7 wells in OML 119, he said.
Briggs said: “These two new wells are producing 12,000bpd. “The only way we can increase our production is really by going out there and do the work. It is either you are repairing a well that has gone down because there are technical issues or you are drilling a well. In the case of Okono, it is the latter because we know there are potentials and all we did was to go out there and drill. I consider Okono 6 and 7 a success because the two wells combined are delivering over 12,000 barrels per day and that by any standard is significant especially in an area where most of the wells around are producing an average of 2,000bpd to 3000bpd.
“Under the able leadership of the former Managing Director who is now Group Executive Director Exploration and Production, Engr. Abiye Membere, our production grew from between 60,000bpd and 65,000bpd to about 130,000bpd. That is about 100 percent growth. For us to meet the 250,000bpd target by 2015, we will have to do another 100 percent growth from our current production. And that is what we are trying to do. First, we tried to repair some of the wells to restore their production capacities. For instance, in OML 26, between when that asset was handed over to NPDC in June and now the production of that field was doubled. All of these have added up to the 130,000bpd production that we are talking about today.
“To meet the 250,000bpd target by 2015 means doubling our production as I said earlier, but I am confident that we will meet the target because the resources are there and the reserves are there, and we have the people. Everything is therefore set for us to meet the target. For example, in the last five years NPDC drilled 10 wells, but we have a target to drill about 40 wells in the next five years. We have two rigs on site today, one offshore and the other one onshore and by the middle of next year we will bring in one more rig and towards the end of the year we will bring in the fourth rig. I believe we shall keep those rigs for the next two years.”
The company said that the drilling of Okono 6 and 7 wells is significant in that it represents a realistic step towards growing the company’s production as well as national production positively. In furtherance of this plan, NPDC has two rigs in site as at today, one is working on Okono 8 while the other is a drilling at Oredo in OML 111.
More rigs will be deployed by next year and also key to this programme is efforts to grow reserves, Briggs said. He noted that while the company is drilling to increase production, the management is also working hard to boost reserves because it is the only way to ensure sustainability. For instance, he said that in one of NPDC’s wells in Okono, the company is drilling deeper to assess its potential. That drilling is going on very well as at today; and if we find what I think we will find, and I think we will find it, that will give us more reserves in that field, Briggs added.
NPDC is also breaking grounds in keeping with its vision to play a leading role in meeting the Federal Government’s aspiration to provide enough gas for domestic use especially in power generation. The Phase 1 of the Oredo Gas Handling Facility situated near Ologbo within the OML 111 has been completed. It currently supplies 65 million standard cubic feet (mmscf) per day of gas to the Nigerian Gas Company (NGC) for onward transmission to Power Holding Company of Nigeria (PHCN) and the National Integrated Power Project (NIPP) Power plants.
The facility was originally designed to gather and process gas from the very prolific Oredo field (OML 111) and supply to the Ihonvbor Power Plant, but the plant has not been completed. The second phase is billed to come on stream by the end of the first quarter of 2013. That will bring an additional 100mmscfd from the plant.
The Phase 2, according the company, would also see the completion of the liquefied petroleum gas (LPG) component of the gas plant, which will deliver about 4000 metric tons of LPG to enhance the drive to get every home to adopt LPG as its domestic cooking fuel as a way to combat deforestation and environmental pollution arising from the use of firewood and kerosene.
The support of the Federal Government under the leadership of President Goodluck Jonathan has been instrumental to these achievements, Briggs said, adding that under President Jonathan and the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, the trend of asset stripping that was the norm under previous administrations has been halted. In fact, assets have rather been handed over to it which is partly responsible for the achievements. The future of NPDC is very rosy and it is well on its way to actualizing the vision of its founding fathers as a major player in the upstream sector of the oil and gas sector.
