The federal government has launched an initiative championed by the Nigerian Upstream Petroleum Regulatory Commission to raise Nigeria's oil production from the current 1.6 million to 2.6 million barrels per day in the next 12 to 24 months. But, the drivers of this idea code-named 'Project 1MMBOPD' must watch it to ensure it does not end up as mere audio and paper talks like many of such failed initiatives in the recent past, writes Peter Uzoho
Last Monday in Abuja, President Bola Tinubu launched the widely celebrated 'Project 1MMBOPD', an initiative of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) aimed at raising the country's oil production from the current 1.6 million to 2.6 million barrels per day (bpd) between the next 12 to 24 months.
The programme coincided with the NUPRC's third anniversary, as it was inaugurated at the same time in 2021, under the Petroleum Industry Act (PIA) that created it.
As expected, the event recorded a massive attendance by industry players. Chief executives of international oil companies (IOCs), including Shell, TotalEnergies, ExxonMobil, Chevron, Oando, and Agip, as well as independent producers like First E&P, Waltersmith, Oriental Energy, Seplat Energy, Heirs Energies, and Matrix Energy, were all on the ground and pledged their support for the realisation of the new target.
In addition, funders and strategic service providers like the United Bank for Africa (UBA), Geoplex, Standard Chartered Bank; Mercurial, and SLB, all promised to work to ensure that the oil industry in the country was revamped.
Avoiding Repeat of Failed Initiatives
But as always argued by keen industry observers and policy analysts, Nigeria does not lack policies, action plans, and laws, but what has continued to be missing is the implementation of such policies and tracking of their performance with the aid of already established key performance indicators (KPIs).
Project 1MMBOPD is not the only attempt made by the NUPRC or any other government institution in the oil and gas industry to address Nigeria's declining oil production. It has always been more talk and less action with little or no result.
In February 2022, NUPRC boasted that it would add 900,000 bpd to Nigeria's oil production by restoring all wells shut-in in 2020 during the COVID-19 pandemic.
In the oil and gas industry, to shut in a well means to close off a well so that it stops producing, and several circumstances could lead to such a decision. The commission had set up an industry-wide audit committee to find out wells that were shut in, and in June 2023, the regulator announced that 3,000 oil wells were shut in and that measures had been put in place towards restarting production and increasing production.
But, to date, nothing has been heard about the wells and the agency has moved on as usual.
Also, between 2021 and 2022, the commission issued 50 Petroleum Prospecting Licenses (PPLs) emanating from the 2020 Marginal Field Bid Round, to deserving awardees, but none of the awardees has been able to achieve first oil production till today, and the commission has also moved on.
However, as succinctly stated during his remarks at the launch of Project 1MMBOPD, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mele Kyari, told the audience that it was time to walk the talk, noting that the oil industry must move beyond PowerPoint presentations.
With 37 billion barrels of oil reserve and over 50 operating companies, Nigeria continues sliding downwards in oil production at just about 1.6 million bpd including condensates, a far cry from the country's theoretical production capacity which is put above three million bpd.
President Banks on the Project
Themed: "Transformation, Innovation, and Excellence", Project 1MMBOPD is a strategic plan aimed at harnessing dormant oil assets and optimising existing ones with the ultimate goal of ramping up Nigeria's oil production by an additional one million bpd within the next 12 to 24 months with the active collaboration of all key stakeholders in the industry?
Represented at the event by the Secretary to the Government of the Federation (SGF), Senator George Akume, Tinubu described the 'Project 1 million bpd' as a giant step forward for the oil and gas industry, designed to grow sustainably in direct response to his charge to increase production.
He explained that by enhancing domestic energy security and supporting economic vibrancy, the initiative would ensure that Nigeria remains a crucial player in the global energy landscape amid the worldwide energy transition.
Increased oil production will lead to more job opportunities, increased revenue for the government, and a more stable energy supply for our dear citizens. The project is not just a government one, but a collaborative undertaking involving major producers, service providers, financiers, and other key stakeholders.
"These commitments will be critical in ensuring that we achieve our incremental targets in the next 12 months, growing not just the production levels but also increasing the efficiency and competitiveness of our industry.
"There will be challenges along the way, such as technical issues, market fluctuations, and regulatory burdens, but with our collective efforts, we are confident that we can overcome these challenges and achieve our goal," Tinubu emphasised.
Komolafe Presents Agency's Scorecard
Earlier in his presentation, the Chief Executive, of NUPRC, Gbenga Komolafe, boasted that in the last three years, the agency had made significant strides towards attaining critical goals despite the persistent challenges of the global push for energy transition and the call for defunding of fossil fuel.
He listed them as the development of regulations, growth in oil and gas reserves, rise in the level of upstream activities, conclusion of the 2020 marginal bid round and issuance of awards with an anticipated 60,000 bpd and 90MMscfd of incremental oil and gas production, among others.
Komolafe maintained that to enhance investment attractiveness and improve global competitiveness, the licensing framework for the ongoing bid rounds was optimised to vacate entry barriers and eliminate huge asset acquisition fees.
Kyari Wants More Action, Less Talk
In his remarks, NNPC's GCEO, Kyari, said that it was time to walk the talk, noting that the oil industry must move beyond PowerPoint presentations.
"Whatever we need to do, we have a clear roadmap, a specific timeline. And indeed, a very specific contracting process. We think our environment is today very competitive for producing oil.
"The second part of it is about the contracting. As we know, it is very good to have Nigerian content and Nigerian contractors should be encouraged to build local companies. Everybody agrees to this. But it has created a new challenge," he stated
Elumelu Laments Threat of Oil Output Decline
In his special presentation at the occasion, Chairman of Heirs Holdings, UBA, and Transcorp Groups, Mt. Tony Elumelu, lamented that Nigeria is currently faced with the threat of declining production and investment.
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He said Nigeria's oil production has been on a downward trajectory, falling from peaks of over two million barrels per day to recent lows, below 1.5 million.
According to him, this decline translates to lost revenues, reduced global market share, and missed opportunities for national development.
Elumelu added, "The root causes are multifaceted: Aging infrastructure, security challenges in the Niger Delta, stalled investments, regulatory uncertainties, and a global shift towards renewable energy that has compounded the investment challenge.
"These factors, combined, threaten the very foundation of our economy, as we are heavily dependent on oil. As a nation, we cannot permit this to continue, and squander our inheritance and betray our next generation."
He highlighted that this is where 'Project 1MMBOPD' is so critical, a crucial part of the solution to unlocking the next phase of Nigeria's development.
"By targeting to grow production by 1 million barrels of oil per day from current levels, we are setting a clear and challenging goal. To be sustainable, this initiative should go beyond just increasing production; it should catalyse a comprehensive strategy to revitalise our entire upstream sector," he observed.
He listed infrastructure modernisation, security enhancement, regulatory streamlining, investment attraction, and technology adoption as some of the measures to optimise production.
"By addressing these areas comprehensively, we will not only aim to reach the 1MMBOPD target but also to create a sustainable framework for future growth. As we embark on this ambitious project to boost our oil production, let us also keep our focus on the critical role of gas in our energy mix," Elumelu concluded.
