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NNPC head talks up downstream interest
NIGERIA
NIGERIAN National Petroleum Corp. (NNPC) managing director Mele Kyari used to talk about saving Nigeria’s ailing downstream sector. Now he’s been talking about getting two of the world’s largest oil companies involved.
“ ey are ready for any investment oppor- tunity that is low risk,” he was quoted by S&P Platts as saying on of apparent interest from Saudi Aramco and Abu Dhabi National Oil Co. (ADNOC).
While Nigeria is a major player in the global oil and products markets, it is hard to imagine that either company would view an investment in the Nigerian downstream as low risk. However, fuel marketers have had a great time in Nigeria for years and the country’s coastal infrastructure perhaps makes it the most obvious point for fuel imports into West Africa.
However, given that Kyari spoke recently about improving domestic re ning capabilities to bring about fuel independence, his tune has changed signi cantly if he views further reliance upon foreign fuels as an improvement for the Nigerian downstream. Kyari was reported to have met with ADNOC CEO and UAE Energy Minister Sultan al-Jaber, saying that part of the company’s plan was “to have a presence in West Africa”.
He added: “We have upstream opportunities, midstream opportunities, downstream opportu- nities. It is up to them to select where they want to be, but we would like them to be in midstream.”
Platts quoted Kyari as saying that Aramco was “quite keen on getting the opportunity to supply gasoline to West Africa and we will pro- vide them with the right platform ...We are the largest importer of gasoline in West Africa. It is a clear opportunity for them.”
OPEC compliance
e same day, NNPC MD said that his country was not fully compliant with OPEC’s production policy, but said that Nigeria intended to take steps to ensure its compliance..
Speaking to the press in Fujairah, Kyari noted that Nigerian elds had yielded 2.1-2.2mn bar- rels per day of crude oil and gas condensate during September. He said that Nigeria would reduce oil output in order to conform to the pro- duction quotas set by OPEC.
e NNPC chief did not say exactly what the country would do or how large the cut would be, but said that the reductions would apply to crude oil and not to condensate. “We will [cut output] across the assets. e OPEC quota [applies to] crude production only, not [to] condensate, so it doesn’t a ect the condensate [ gures],” he said.
He stated that he did not expect the reduc- tions to have a major nancial impact on Nigeria. “Our non-conformity is clearly on the crude, and it’s not signi cant,” he said. “So when you spread it across all the assets, it will not be a shock.”
Kyari went on to say that Nigeria hoped to push oil production up to around 3mn bpd over the next two or three years. He did not say how it might reach this target or how rising output might a ect relations with OPEC.
As a member of OPEC, Nigeria is party to the agreement signed between the cartel and Russia, along with other allied oil producers, last December. Under that agreement, Nigeria is due to help OPEC meet its pledge to cut oil produc- tion by 800,000 bpd on end-2018 levels.
But according to a Reuters survey, it exceeded its quota by 265,000 bpd in September. is was the largest gap posted by any cartel member dur- ing that month, the news agency commented.
Week 40 09•October•2019 w w w . N E W S B A S E . c o m P9
