NNPC Will Reopen Its Lake Chad Oil Search Next Week, According To Kyari

According to Malam Mele Kyari, Group Chief Executive Officer (GCEO), the Nigerian National Petroleum Company Limited (NNPC), oil exploration in Lake Chad will continue the next week.

President Muhammadu Buhari had given the corporation the go-ahead, according to Kyari, to resume oil exploration in Borno State's Lake Chad Basin after it had been put on hold for more than five years owing to insurgency in the North East.

The head of NNPC observed that the November 2017 discovery of oil in the Kolmani River (upper Benue trough) between the states of Gombe and Bauchi provided encouraging signs for further efforts in Lake Chad.

He said, "It was the Kolmani that helped us to locate a position in Nasarawa State. It is the same reason that by next week, we'll spud in another well in the Chad Basin. Mr President directed us over a year ago that we should go back to the Chad Basin and continue exploration work."

Justifying the planned resumption of the oil search, Kyari said: "Security of our workers is the most important element of our work. We have assessed the environment and we know that substantial peace has been regained in the Chad Basin. Communities have returned to their locations and their villages. You do not hear of incidents and there is substantial containment of this.

"And we're also working very closely with the security agencies; the state government to make sure that staff are safe, our equipment are safe. I will have no doubt that the safety of our staff is assured and that's why we are going back because there is relative safety in the location," Kyari explained.

Public trading of NNPC shares will begin in 2024.

According to Kyari, Nigeria owns all of the shares in NNPC Ltd.

"So, the over 200 million Nigerians are literally the shareholders of this company today. These shares are held in trust by the Federal Ministry of Finance Incorporated, and the Federal Ministry of Petroleum on behalf of the federation.

"What the Petroleum Industry At 2021 (PIA) provided for is that within three years, this company's ordinary shares can be sold to other Nigerians or interested international partners that combine shared values. There's a process for this- that means you must take it to an Initial Public Offering (IPO) level.

"Once at IPO level, those shares will be declared. It will be done with the authority of the National Economic Council, which means all the 36 governors of the state must agree that certain shares of this company can be sold.

"We believe that the system's transparent and accountability processes that we have on the ground are sufficient and by the end of June, maximum by the end of the year, it will be clearly IPO already. The timeline is that it can be done within three years of the incorporation of NNPC, which is effective from 2021, by 2024 we should be able to go to IPO," he noted.

2023 P/H refinery completion; 2024 Warri and Kaduna

The NNPC president also provided an update on the progress of the initiatives to renovate the refineries, noting that, but for minor supply problems, the Port Harcourt refinery would have been finished this month.

Kyari stated: "Our plan is to bring it on stream this month but unfortunately, we have some slippage because of global supply chain issues that we had. We believe that this plant will come on stream before the end of this year. We're very sure of that. The Port Harcourt refinery has a combination of 210,000 barrels per day so that means it's a third of the Dangote refinery."

Linking a gas pipeline to Europe and more than 11 countries

Nigeria is more of a gas country than an oil one, according to Kyari, who was speaking about the delivery of more gas infrastructure in Nigeria and elsewhere.

A total of four refineries in three locations with a 445,000 barrel capacity make up NNPC. According to Kyari, money for the renovation of the refineries was borrowed and repaid based on how well they performed rather than using public monies.

"We're also borrowing to fix the Warri and Kaduna refinery. Kaduna will kick up, it is a 36 months project but what happens in the rehabilitation is that you do them stage by stage. We will replicate the same thing in the Warri refinery and the contractor is on site and Daewoo is on site working; mobilised to site, equipment being delivered to site and we believe also that within that 36 month cycle, it will also complete the rehabilitation but we'll start fuel before that time.

"Port Harcourt will start producing fuel this year and by the first quarter of next year, Kaduna will start producing fuel," the NNPC boss revealed.

"We are actually a gas country with associated oil. You know, our focus has always been on oil, we have never paid significant attention to gas, and there's so much gas here in this country that maybe another 100 years we still have gas because we have close to 600 trillion standard cubic feet (scuf) of gas in place."

Ajaokuta Kaduna Kano (AKK) and the Nigeria-Morocco gas pipeline are the two pipelines that Kyari said NNPC is aiming for when it comes to gas export. The trans Algeria pipeline into Europe also uses this project.

On the AKK pipeline project, he stated: "The AKK component is just one leg of it starting from Ajaokuta through Abuja, Kaduna into Kano, and potentially what we're trying to do now is to see if there's excess capacity, which can make it across the Sahara into Europe."

Also disclosed by Kyari is the impending start of one of the power plant projects along the AKK route. "We have almost completed contracting so we will commence construction of the Abuja power plant within this month or latest by next month. I believe that we will start it soon so that we can now have power in Abuja, create a power plant in Kaduna and also in Kano. That way, power comes close to his consumers, transmission through the grid becomes easier," he said.

He said of the Morocco project: "That's one of the most ambitious projects we have and will cost over $25 billion, but more importantly, it will connect 11 West African countries to our gas sources and that's how we'll be generating prosperity around Nigeria.