Amid mounting concerns over the inadequate domestic crude oil supply to the Dangote Petroleum Refinery and other indigenous refiners, the Independent Petroleum Producers Group (IPPG) has urged President Bola Tinubu to declare a state of emergency on crude oil production in Nigeria, PUNCH reported.
This call comes in response to the ongoing crisis affecting the sector.
The IPPG, an association comprising 28 Nigerian indigenous upstream exploration and production companies, including Oando Plc, Aiteo, Seplat, and others, expressed fears that the low crude production could lead to a partial implementation of the 2024 budget.
This plea coincides with the Nigerian National Petroleum Company Limited (NNPCL) announcing a "war" on the challenges confronting oil production nationwide.
NNPCL's Group Chief Executive Officer, Mele Kyari, disclosed this during the Nigeria Oil and Gas Conference in Abuja on Tuesday, emphasizing the need for a collaborative effort to enhance crude oil output.
Nigeria's oil production has been on a decline, dropping from over 1.4 million barrels per day in January to about 1.2 million barrels per day in April.
The IPPG believes that the country should be producing approximately two million barrels per day to meet local refinery demands and fulfill export commitments.
The IPPG Chairman, Abdulrazaq Isa, highlighted the urgent need for extraordinary focus and action to mitigate the industry's long-term sustainability concerns.
"As a matter of national importance, Nigeria must act fast and hasten the pace of recovery across the entire industry, even if it means Mr. President declaring a state of emergency in the oil and gas sector!" Isa declared.
He further emphasized that unlocking incremental production is achievable through collaboration and commitment between industry regulators and operators.
Despite Nigeria’s substantial hydrocarbon resources, including over 37 billion barrels of proven crude oil reserves and 207 trillion cubic feet of proven and contingent gas reserves, the country's daily production has significantly dropped.
Isa noted the potential risk of Nigeria becoming unable to meet its domestic refinery crude demand or becoming a net importer of crude oil.
He called for urgent measures, including the immediate conclusion of all pending International Oil Companies (IOC) divestment transactions and addressing deepwater development and production issues.
He proposed enabling deepwater development to attract significant economic benefits and adopting a national value-retention strategy to transform Nigeria into a net exporter of refined petroleum and petrochemical products.
Isa also stressed the need to grow daily production to 2.5 million barrels of oil and 10 billion cubic feet of gas to ensure the country meets domestic demands and export commitments.
The IPPG chairman also highlighted the importance of developing Nigeria's gas resources to catalyze economic growth and complement decarbonization efforts.
He urged significant investments to address the current gas infrastructure deficit and emphasized that these priority areas provide the most realistic and sustainable pathway towards meeting Nigeria’s long-term production aspirations of four million barrels of oil and 13 billion cubic feet of gas per day.