Energy Capital & Power

Market Report: NNPC Targets Three Million Barrels of Oil Per Day

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The Nigerian National Petroleum Corporation (NNPC) has set a target of three million barrels per day (bpd) oil production, according to Alhaji Mele Kyari, Group Managing Director of NNPC. Alhaji Kyari said the drilling of Kolmani River III well is ongoing, with a very high prospect of finding oil.  

Seismic data collection is ongoing in the Bida Basin, as well as re-launching exploration work in the Chad Basin. Kyari said several alternative funding facilities have been secured for the Nigerian Petroleum Development Company (NPDC), along with the establishment of joint ventures to facilitate the development of some assets. These include the N875.75 million ($2.2 million) NPDC OML 65 Alternative Funding and Technical services package with CMES-OMS Petroleum Development Company, and the $3.15 billion Alternative Financing Package with Sterling Exploration and Energy Production Company Limited and other partners for the development of NPDC’s OML 13. Alhaji Kyari also stated that the Corporation is investing aggressively in gas to take advantage of the energy transition and equip Nigeria for the future, in the face of the dwindling petroleum liquids volumes.

At the 2021 budget defense and performance appraisal meeting at the National Assembly Complex, Alhaji Kyari announced that gas supply has drastically improved to power generation companies, adding that the major challenge now is that of transmission. Kyari stated that the NNPC’s success in the gas sector was due to the support from and cooperation of the committee and the entire legislature, and that the improvement of gas supply to power is evident by the improved power supply witnessed in the country.

Meanwhile, Minister of State for Petroleum Resources H.E. Chief Timipre Sylva has stated that ongoing exploration for hydrocarbons in the northeast region of Nigeria by the NNPC has been successful. Two oil wells have been drilled in Gombe State, while exploration continues on the Nigerian side of the Chad Basin.


Panoro Energy announced that production from the Tortue field in the Dussafu permit offshore Gabon averaged 15,449 bpd during the third quarter. Despite a short shut-in for operational reasons, production continued from four wells. Of the remaining Phase 2 wells at the Tortue field, DTM-6H has been drilled and completed, but not hooked up to the floating production storage and offloading unit (FPSO), while DTM-7H remains to be drilled.

The Hibiscus/Ruche Phase 1 will be the next phase of development at the block, comprising four production wells at the Hibiscus field and two at the Ruche field, all tied back to the FPSO BW Adolo through a platform and pipeline. Hibiscus/Ruche Phase 2 will involve adding six more development wells. Planning and engineering activities for Phase 1 with an alternative plan for development are expected to lower the break-even oil price for Hibiscus/Ruche Phases 1 and 2 to around $25 per barrel. BW Energy has purchased two jack-ups, one to be used for Phase 1, following conversion to an offshore installation. However, a final decision to restart the Hibiscus/Ruche development is subject to the lifting of COVID-19 restrictions to facilitate project execution. Panoro added that interpretation of recently re-processed seismic data over Dussafu suggests a potential for additional oil reserves in the greater Hibiscus area. The partners plan an appraisal well as part of the 2021 drilling campaign to test this interpretation.


On November 26, oil prices retreated a little in light trading, with volumes significantly down due to the U.S. Thanksgiving holiday, but crude was still holding on to almost all its gains in a rally that has seen it rise a spectacular $10 a barrel in the last month. The U.S. West Texas Intermediate crude futures were down 0.9% at $45.28 a barrel, while Brent crude futures were down 1.1% at $48.01 a barrel. The U.S. Energy Information Administration’s weekly report for November 25 showed a draw of 754,000 barrels for the week ending November 20, instead of a 127,000-barrel rise as predicted by analysts in a Reuters poll.

Investors are also awaiting the upcoming meeting by the Organization of the Petroleum Exporting Countries and allies (OPEC+) – the outcome of which will likely provide support or at least maintain the current balance. OPEC+ are leaning towards delaying 2021 planned increase in oil output to help the market weather the second wave of COVID-19 and rising Libyan output, according to three sources close to the Organization. OPEC+ was planning to raise output by two million barrels per day in January 2021 – about two percent of global consumption – as it moves to ease 2020 record supply cuts. Rising Libyan output is contributing to concerns about oversupply in the market as many people are ignoring lockdown advice and traveling.  

Despite the internal dissent in the group, OPEC+ are expected to maintain the supply caps past the current end date by at least three months. Actual dates will be decided at the 180th Meeting of the OPEC Conference and the 12th OPEC and non-OPEC Ministerial Meeting on November 30 and December 1, respectively. Further oversupply woes may be ahead, as U.S. oil shale production becomes viable again due to the price hikes.

Oil shale extraction halted during the recent low-value period, as extraction costs are much higher than standard methods. However, continued optimism over a return to normal economic conditions post-COVID-19 pandemic prevented a heavier price slip. Positive news on the vaccine front continues to deliver tailwinds to the market, with multiple vaccines now on track to be delivered in the future.

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Sihle Qekeleshe is a Web Editor at Energy Capital & Power. She has experience as a Copywriter and Editor in various industries.