Prevailing dynamics an sentiments in the international crude oil market favour the projected crude oil production and price benchmarks in the proposed 2024 Appropriation Bill before the National Assembly, the Group Chief Executive of the Nigerian National Petroleum Company Limited, Mele Kyari, has said.
The N27.5 trillion Fiscal Appropriation Bill tagged ‘Budget of Hope’ presented to the National Assembly for the 2024 fiscal year set the expected average crude oil production capacity of 1.78 million barrels per day and average crude oil price of $77.96 per barrel as key benchmarks for the oil sector.
Speaking during an interactive session with the Senate Committee on Finance at the National Assembly, Abuja, on Wednesday Kyari justified the projected benchmarks, saying they were realistic and realisable, as current dynamics at the international crude oil market favour them.
“With what we see in the market today, and potentially in the year 2024 and even beyond the next two years, it is very unlikely to see $70 per barrel oil in the market. The oscillation we are seeing, sometimes you do see prices coming down to $75 per barrel, and sometimes it goes above it. Overall, benchmarks are averages. We think that the proposal by Mr. President around crude oil at $77.96 per barrel is still realisable in 2024,” Kyari assured.
On the crude oil production projection, the NNPC Ltd GCEO said: “The number we have is 1.785 million barrels per day (mbpd). This is cumulative of all oil produced in the country. This figure is inclusive of all production including crude oil and condensate. I need to make this clarification, because of the reports in the media that our (Nigeria’s) Organisation of Petroleum Exporting Countries (OPEC) quota is 1.5 million barrels per day. The OPEC quota is related only to crude oil production. We also do between 250,000 to 300,000 barrels per day of condensate in our production. When you combine the two, the 1.78 mbpd is realistic and realisable,” he explained.
Kyari was optimistic that although there were challenges, such as security concerns in the oil producing areas which have resulted in force majeures being declared by the oil companies, measures being deployed by the Federal Government through the NNPC would help check the situation and guarantee the realisation of the projected level of oil production in the budget.
Force majeures are legal information issued by contracting firms to inform all parties that due to unforeseen circumstances they may not be able to deliver the contractual obligations according to agreed schedules, conditions and terms.
The GCEO also assured that the NNPC Ltd. would maintain the level of dividends remittance to the Federation Account as stated in the Medium-Term Expenditure Framework, adding that the projected dividends from the Nigeria Liquefied Natural Gas Ltd. was also realisable and would be remitted directly into the Federation Account as stipulated by the law.
On the Company’s Road Tax Credit Scheme, Kyari explained that all the roads being undertaken under the scheme would be duly completed on schedule, adding that the scheme was undertaken by the NNPC Ltd. with the Ministry of Works and the Federal Inland Revenue Service only playing supervisory roles to ensure value was delivered for every kobo paid.
Speaking earlier, the Chairman of the Senate Committee on Finance, Mohammed Sani Musa, said the purpose of the interactive session was to deepen conversations on the projections in the 2024 Appropriation Bill to help the lawmakers determine what and where to adjust.
He expressed satisfaction with the explanations offered by the NNPC Ltd.’s helms man, saying the successful implementation of the budget required the cooperation and support of all stakeholders.