Nigeria’s federal government has recommitted itself to meeting its 2016 target of boosting daily oil production amid operational shortcomings.
The country’s Minister of State for Petroleum Emmanuel Ibe Kachikwu on Sunday said he wants to increase output up to 2.5 million barrels per day (bpd). The country currently produces 2.3 million bpd.
The west African oil industry, is marred with challenges that have hampered the country from achieving it’s maximum output potential.
Big offshore projects have been held up by much-delayed government funding and uncertainty over fiscal terms.
Kachikwu said debt as of November stood at $3.5-$4 billion, which Nigerian National Petroleum Corporation (NNPC) wanted to cut through deals such as a $1.2 billion multi-year drilling financing signed with Chevron in September.
“There is increased conversation going on, I think when we met in December you had blocs that were hardly talking to one another, everybody was protecting their own positional logic now I think you having cross logic, people are saying what’s the deficiency in your logic versus what’s the optimum side of your logic. So people are talking a lot more intellectually now,” Kachikwu said.
In October 2015, Nigeria’s oil refineries had zero production due to the level of decay. For over 20 years, the equipment had not been changed or maintained. Kachikwu said the country is still in talks with external investors such as Italy’s Eni and oil traders Vitol and Gunvor, whom the country wants to partner with to revamp the assets.
“We haven’t been able to be sure that if we hold those meetings we can actually walk away with some consensus and in the absence of that we didn’t think we should, and we thought that given what was happening in terms of …. It’s a very funny dynamics because a lot of barrels are tumbling out of the market from non OPEC markets, so the Saudi philosophy is obviously working but again it’s not influencing however the pricing which means that whether we like it or not some barrels are also coming in which may be over production by members and non members to cover up whatever is going out,” Kachikwu said.
In an effort to reform an industry hampered by mismanagement and corruption, the country’s president Muhammadu Buhari in June 2015 fired the entire NNPC board of directors and appointed Kachikwu to overhaul the state- owned company.