The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mr. Mele Kyari, has sounded the alarm over the escalating issues of oil theft and vandalism in the Niger Delta region. Speaking before the Senate Committee on Appropriation on the proposed budget for 2024, Kyari described the situation as a calamity with potentially far-reaching consequences.
Kyari disclosed that there are over 4,800 illegal connections on crude oil pipelines in the Niger Delta, emphasizing the abnormal security conditions in the area. He expressed concerns that these criminal activities could significantly impact the daily oil production, stating that the production levels would depend greatly on the security situation in the oil-rich Niger Delta region.
“The situation we have in the Niger Delta in terms of security is a calamity. We don’t have that anywhere in the world,” Kyari remarked, adding that engaging non-state actors as a last resort is abnormal but necessary to address the security challenges.
The CEO highlighted the environmental damage and the colossal impact on host communities, stating, “What is happening is a colossal damage to the environment and the host communities.”
In a sharp disagreement between the Senate and the NNPCL, plans to increase the crude oil production benchmark in the 2024 Appropriation Bill from 1.7 million barrels per day to 1.8 million barrels per day were contested. While Senator Olamilekan Adeola pushed for the increase, Kyari rejected the move, insisting on adhering to the benchmark approved by President Bola Ahmed Tinubu.
Kyari provided updates on refinery operations, mentioning that the Port Harcourt refineries would come online in December, the Warri Refinery would resume production in the first quarter of 2024, and the Kaduna Refinery had a production target for December 2024.
The CEO also credited President Bola Tinubu for terminating the fuel subsidy regime, asserting that the company would have collapsed without this intervention. Senators expressed dissatisfaction with the N406 billion dividend to the Federation Account between July and November from NNPCL, urging the company to aspire to global standards.
Kyari concluded by emphasizing the importance of sticking to the estimates supplied by Mr. President, citing realistic crude oil price and production benchmarks based on dynamics in the global oil market. He noted that until the passage of the Petroleum Industry Bill into law, the company was not run like a profit-driven enterprise.
