We Are Developing Nigeria’s Gas Assets To Cushion Low Demand For Crude Oil-Kyari

The Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari has said that the Federal Government is developing Nigeria’s gas assets to enable the country cushion the negative impact of global decline in the demand for crude oil.

The GMD, who said this on Wednesday at the 11th Golf Intelligence Global UAE Energy Forum, noted that the government would focus more on gas for domestic use and also for exports.

He explained that the permutation about the oil market has not been as expected, adding that going forward, Nigeria’s oil market would be driven by demand and not supply.

Kyari said that although, demand is expected to rise; it would not be as high as the pre-Covid-19 era, because of the drop in fuel consumption.

The Federal Government through the National Gas Expansion Programme is making Compressed Natural Gas the fuel of choice for transportation and Liquified Petroluem Gas the fuel of choice for domestic cooking, captive power and small industrial complexes.

Currently, the Federal Government is executing the $2.8bn Ajaokuta-Kaduna-Kano Gas Pipeline project to boost gas supply.

According to the GMD, the Corporation has recognized the impact of energy transition and is currently diversifying its portfolio beyond oil assets through domestic gas utilization projects, support of research and innovation.

Kyari said, “We are going to have decline in demand of transportation fuel, and aviation and that is a big challenge for us. We saw the challenge; hence we are going to do more gas this year.

“We will see more presence of gas in the energy transition and mix, and we are increasing our gas for domestic use and also for exportation.

“Hence, gas and renewable energy will continue to increase in their contribution to the global energy mix

On the impact of the change of government in the United States to the oil market, the GMD expressed optimism that the global oil market would receive a leap as the Biden’s administration begins on January 20.

He said that the global market is hopeful of a better US-Iran relationship which is critical to the safety and stability of the crude oil market.

“The Biden administration would be interested in carrying out projects that would reduce carbon phosphate, and that is what we are doing.

“There is a likelihood that there will be a better situation to the Iran/US relationship, that is our hope and expectation so that the market would be safer and balanced.”

Speaking on the nation’s compliance to the recent OPEC cut, he said Nigeria would continue to support measures being rolled out by OPEC to reposition the global oil industry.

Kyari stated, “Compliance to the OPEC Cut is an obvious choice that we have to make. Although it poses a challenge to our revenue, we see a better picture of getting the best out of this situation by complying with it.”

Recall that following the instability of the global oil market, occasioned by the COVID-19 pandemic, Nigeria, as well as other member countries of OPEC had voluntary reduced the level of daily oil production to promote market stability and boost crude oil prices.

OPEC+, consisting of members of OPEC and their allies in non-OPEC, are expected to cut a total of 7.125 million barrels per day, and 7.05million barrels per day in March.

Out of its 1.829 million barrels per day capacity, Nigeria is expected to cut about 313,000 barrels, to bring its daily output figure further down to 1.516 million barrels per day till March.