Elumelu seeks higher crude production, IoC partnership

The Chairman of Heirs Holdings Group and United Bank for Africa (UBA), Tony Elumelu, said the one million barrels project initiated by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is a crucial part of the solution to unlock the next phase of development in the country’s oil sector.

Elumelu noted that the challenges in the sector threaten the country’s economy, which is heavily dependent on oil, hence the call for sustainable solutions to save the situation.

He made this known at the third anniversary of NUPRC, where he called on international oil companies (IoCs) to increase collaboration with indigenous firms. He emphasised that the theme: ‘Transformation, Innovation and Excellence’, resonated with the challenges and opportunities facing Nigeria’s energy space.

Elumelu said the private sector has the power to transform the continent through long-term investments while working collaboratively with the public sector.
Heirs Energies, he said, has adopted best practices and global standards and integrated them into indigenous capabilities.

“By combining your global expertise with our local knowledge and commitment, we can drive innovation and excellence across the entire value chain, effectively addressing the challenges we face,” he said.

Commending the NUPRC for the Project One MDOPD launch, Elumelu said by targeting to grow production by one mbopd from current levels, the country is setting a clear and challenging goal, which he believes is achievable. He urged all stakeholders on the needed collaboration, innovation and excellence to make this project a success for the benefit of the country.

For sustainability, he said, the initiative should go beyond just increasing production to catalyse a comprehensive strategy to revitalise the entire upstream sector.

“Nigeria’s oil production has been on a downward trajectory, falling from peaks of over 2 million barrels per day to recent lows, below 1.5 million. This decline translates to lost revenues, reduced global market share, and missed opportunities for national development. The root causes are multifaceted: ageing infrastructure, security challenges in the Niger Delta, stalled investments, regulatory uncertainties, and a global shift towards renewable energy that has compounded the investment challenge,” he said.

Stressing the need to focus on gas, Elumelu said the path to one MMBOPD must be constructed on strategies that maximise the value of gas resources to reduce flaring, rather than increasing utilisation for domestic and export markets.

“The dual focus will help diversify our energy portfolio and mitigate the risks associated with over-reliance on oil. We know the criticality of gas in improving access to electricity in Nigeria. Access to electricity is the single most important factor in our quest for industrialisation. You can now see that our oil and gas sector is pivotal to the development of our country,” he said.

He said Heirs Energies was working on increasing its gas production to meet the current energy needs and feed many power generation plants and gas-based industries

“In the first 100 days after we took over operational control of our OML-17 asset in 2021, we doubled our production from 28,000 to over 50,000 barrels per day. We suffered a setback with unabated crude theft, which caused us to shut in and work collaboratively with the NNPC Limited to better secure the pipeline system.

“From a low of five per cent terminal receipts in December 2021, year-to-date in 2024, we have recorded an average terminal receipt of 85 per cent: a remarkable improvement and a good example of what a purposeful collaboration between NNPCL and operators underpinned by rigorous execution can deliver,” he noted.