By Paul Wallace and Elisha Bala-Gbogbo on 4/25/2019
ABUJA (Bloomberg) — Nigeria plans to almost double oil production and triple its refining capacity by 2025, reviving previous pledges for the country’s oil independence.
The OPEC member is looking to pump 4 MMbopd by 2025 and increase refining capacity to 1.5 MMbpd, Maikanti Baru, managing director of state-owned Nigerian National Petroleum Corp., said at a conference Thursday in the capital Abuja. “Nigeria needs to unlock new barrels as quickly as possible,” he said.
Africa’s biggest oil producer previously set a 4 MMbopd production target for 2010, and successively delayed it over the years. The country, where output peaked near 2.5 MMbpd in the middle of the last decade, has grappled with militant attacks, leakages and theft at its oil infrastructure.
“Targets such as these are not new to NNPC,” said Cheta Nwanze, an analyst at Lagos-based SBM Intelligence. “Nigeria has not met a single production target for at least a decade now, in many cases because of security concerns.”
Nigeria also wants to be self-reliant in meeting its fuel demand and cut imports that put a strain on foreign reserves. Oil Minister Emmanuel Ibe Kachikwu told the BBC in 2017 that he’d step down if the country doesn’t achieve that goal by the end of this year. The target is likely to be missed as the four state-owned refineries struggle to fully utilize their combined 445,000 bopd capacity following years of neglect and mismanagement.
Baru said part of the additional refining would come from a 650,000 bopd complex being built near Lagos by Aliko Dangote, Africa’s richest person. NNPC is working with private investors for the remainder, Baru said.
“The desperate need for an improvement in local refining capacity has been obvious for decades,” Nwanze said. The 2025 plan is “extremely optimistic.”
NNPC, which pumps crude from the country’s fields in partnership with international companies like Royal Dutch Shell Plc and Exxon Mobil Corp., returned to profit in 2018 after reporting losses in at least the three previous years, according to statements on its website. That was mainly due to the strong performance of its oil and gas production unit. Its refineries had a $365 million operating loss.