Nigeria Hopes New Upstream Deal Will Boost Its Oil Production to 2 Million Bpd

The latest upstream deal in Nigeria’s oil sector is expected to help boost crude production in the country to 2 million barrels per day (bpd) by the end of 2024, Heineken Lokpobiri, Nigeria’s Minister of State Petroleum Resources, has said.

The latest acquisition of assets of a foreign firm by a local oil company was completed at the end of August when Italy’s energy major Eni announced the closing of the sale of its wholly owned subsidiary, Nigerian Agip Oil Company Ltd (NAOC), Oando PLC, Nigeria’s leading local energy firm.

NAOC is active in onshore oil and gas exploration and production in Nigeria, as well as power generation. The sale of NAOC aligns with Eni’s strategy focused on the rationalization of its upstream activities by rebalancing its portfolio and divesting non-strategic assets, the Italian company said.

The deal has been stalled by regulators for months, but it has finally received approvals to go ahead.

Now Oando, with the necessary support, could boost production and help reach the Federal Government’s target to have 2 million bpd output by the end of 2024, minister Lokpobiri said.

“I will ensure that I do everything humanly possible to create the best environment for Oando and other companies operating in the Niger Delta region to increase production, which we seriously need now,” the minister was quoted as saying by Nigeria media.

“Our target is to hit at least two million barrels production by December,’’ Lokpobiri added.

Earlier this summer, Nigeria’s national oil company NNPC declared a state of emergency on production in Nigeria’s oil and gas industry as Africa’s largest oil producer struggles to boost output.

NNPC believes that Nigeria needs to take urgent action to address the challenges that have plagued the oil and gas industry for years, said NNPC Group CEO Mele Kyari.

Oil theft and pipeline vandalism have long plagued Nigeria’s upstream oil and gas industry, driving majors out of the country and often resulting in force majeure at the key crude oil export terminals.