Report: NNPC could lose half its production by 2030

• The NNPCL faces a imaginable 50% diminution successful lipid and state accumulation by the precocious 2030s owed to an overreliance connected non-operated, sub-commercial assets and a deficiency of caller projects
• Despite ambitious targets acceptable by President Tinubu's medication to boost accumulation and concern by 2030, infrastructural challenges and precocious operational costs endanger these goals
• Wood Mackenzie highlights the urgent request for NNPCL to amended its task pipeline and outgo competitiveness to guarantee semipermanent viability and growth

Legit.ng writer Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

By the precocious 2030s, the Nigerian National Petroleum Company Limited (NNPCL) whitethorn suffer up to 50% of its lipid and state production, according to a caller study by the planetary energy probe steadfast Wood Mackenzie.

The consulting steadfast claimed successful its astir caller podcast, "A New Era for NNPC and Nigeria's Upstream Oil & Gas Sector," that NNPCL's portfolio is overburdened by galore sub-commercial assets, raising questions astir its semipermanent viability.

The valuation follows Mele Kyari's resignation arsenic Group CEO and coincides with caller goals acceptable by the medication of President Bola Tinubu to fortify Nigeria's upstream industry.

Oil output to decline

Wood Mackenzie's squad of experts, which included Ian Thom, Research Director for Upstream; Neivan Boroujerdi, Director of Corporate Research; and Mansur Mohammed, Head of West Africa Upstream Content, utilized its caller upstream benchmarking instrumentality to item that though accumulation whitethorn amended somewhat successful the abbreviated term, output is predicted to highest by 2026 earlier sharply declining.

“What is unsocial to NNPC is that, dissimilar galore different National Oil Companies wrong our firm beingness and astir the world, astir of its accumulation and assets are non-operated.“So it has large ambitions to turn its concern and the Nigerian upstream sector, but overmuch of that volition trust connected different IOCs astir the satellite and indigenous producers, wherever assets volition person to vie for superior wrong a wider portfolio.“And if we look astatine accumulation successful much detail, we tin spot that it is increasing successful the abbreviated term. That’s acceptable to highest successful 2026. But clearly, determination are challenges successful the longer term. By the precocious 2030s, accumulation could beryllium fractional of what it is today,” the squad stated, citing a deficiency of task pipelines and an over-reliance connected non-operated assets.

Wood Mackenzie pointed retired that NNPCL's accumulation is mostly reliant connected assets tally by overseas and home lipid corporations, successful opposition to different nationalist lipid companies that person greater operational control. This increases its sensitivity to superior allocation choices made extracurricular Nigeria and restricts its capableness to straight power output growth.

“So determination is simply a deficiency of longevity successful the portfolio. It needs much projects successful the pipeline. And if we look astatine the reserve base, what you spot is that NNPC has a immense magnitude of resources wrong its portfolio, but astir of those resources are inactive sub-commercial. NNPCL has large ambitions, but its aboriginal hinges connected however overmuch superior different players are consenting to put successful Nigeria,” the analysts said. “Right now, there’s a deficiency of longevity successful its portfolio. It needs caller commercialized projects urgently.”

President Tinubu has tasked the NNPCL management, led by Group Executive Chief Officer Bayo Ojulari, with achieving an ambitious acceptable of goals by 2030, including raising lipid accumulation to 3 cardinal barrels per day, state output to 10 cardinal cubic feet per day, attracting $60 cardinal successful investment, and refining 500,000 bpd domestically.

However, Wood Mackenzie says that fiscal obstacles and structural inefficiencies could undermine these goals.

Wood Mackenzie identified long-standing infrastructural limitations arsenic a important roadblock to state production. According to the report, Nigeria has important undeveloped state reserves, peculiarly successful the Niger Delta. However, due to the fact that of inadequate processing and proscription facilities, little than 20% of the remaining volumes are deemed commercially viable.

“For instance, the OB3 pipeline, which should link state fields successful the Eastern Delta to Lagos and different markets, has faced years of delay. Its completion could beryllium a crippled changer,” the study said.

Another contented is operational expenses; according to Wood Mackenzie's benchmarking tool, NNPCL has a higher outgo basal than its competitors owed to a fig of variables, including insecurity, tube losses, and legislative difficulties specified arsenic section contented laws.

“The institution indispensable urgently code its outgo competitiveness, particularly if it wants to pull investors oregon see an Initial Public Offering successful the future,” the squad warned.

NNPC speaks connected capableness of PH refinery

Legit.ng reported that the Nigerian National Petroleum Company Limited has confirmed that, contrary to what the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) claimed, the aged Port Harcourt is currently operating astatine 90% capacity.

PETROAN said connected Thursday that the refinery is present moving astatine 70% of its installed capacity, with plans to ramp up to 90%.

Although the refinery's nameplate states that it can nutrient 60,000 barrels of lipid per day, ChannelsTV reported that a connection issued by NNPCL spokeswoman Olufemi Soneye connected Friday, November 29, stated that it is presently operating astatine 90% capacity.

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Source: Legit.ng