The Nigerian National Petroleum Corporation (NNPC) has said that Nigeria will start producing lesser crude and will now shift its focus on the production of more condensates.
This disclosure, according to the body, was made by the Group Managing Director, Mr Mele Kyari during a webinar organised by oil giant, Seplat last week.
Mr Mele said that the production of more condensates will help to balance its commitment to output cuts deal by the Organisation of the Petroleum Exporting Countries (OPEC) of which condensates are exempted.
Condensates refer broadly to any type of oil that “condenses” into a liquid after being freed from high-pressure wells, where it often lurks in gas form or separated from gas. But once it becomes a liquid, there is no agreed way to tell condensate from ordinary crude.
The ongoing cuts by OPEC and its non-OPEC partners allow Nigeria to produce at most 1.4 million barrels per day as against an output of between 1.8 – 2.5 million barrels in existence before the agreement.
Explaining further, Mr Kyari said although the NNPC targets production of 3 million barrels per day, however, current market volatility due to the present health crisis puts such prospects at risk.
“The market can’t take all of our production at the moment,” he said referring to how low demand had stiffened market competition leading to a drop in the price of crude oil.
“There is tighter competition out there, the world, as well as Nigeria, can’t sell its oil so no need to produce what we can’t sell and end up flooding the market with it,” he added.
Mr Kyari said NNPC has just two major focuses for the year, which he listed as bringing down production cost to $10 per barrel and creating batter market conditions for more gas production.
“NNPC is focused on bringing down the cost of production. No need to operate where you can’t produce because there is no room for subsidy anymore”.
“And we are currently putting down structures and facilities to attract gas investors because we believe this season is for gas,” he said.
