11-12-09 The Nigerian National Petroleum Corporation (NNPC) disclosed that barring any serious disruptions in the oil industry, Nigeria's oil production level is expected to hit 2.087 mm bpd and could reach a peak of 2.506 mm bpd in the 2010 fiscal year.
About $ 285 mm has been earmarked for new oil projects. The funding for the new projects will consist mainly of expenditures required to cover front end work (preliminaries) that would aid proper project definition in time to get them ready fro future investment decisions.

Group Managing Director (GMD) of NNPC, Mohammed Barkindo, stated this at a meeting with the House of Representatives Committee on Petroleum (Upstream) as part of the legislative oversight to appraise the activities of the oil corporation in 2009 and examine its projections for the coming year.
Barkindo who was represented at the meeting by the Group Executive Director, Exploration and Production, Philip Chukwu, said the expected increase will be dependent on the sustenance of peace in the Niger Delta region where the oil exploration and production are concentrated. Barkindo stated that with the successful completion of the first phase of the Amnesty Programme, the industry foresees an upsurge in oil production activities as the various oil firms will now have the opportunity to carry out major repairs on their facilities that were hitherto vandalised as well as re-enter previously no-go areas.

According to him, the NNPC will concentrate on the completion of domestic gas related projects that are critical to power generation in line with its earlier agreement with the Federal Government on meeting the challenges of the energy sector in the country.
In a separate presentation, Group Executive Director (Planning), National Petroleum Investments Management Services (NAPIMS), Mr Victor Briggs said the sudden drop in crude oil and natural gas prices late last year coupled with the surge in the cost of goods and services in the oil and gas sector have continued to impact negatively on the profitability of the Nigerian oil and gas sector.

Apparently justifying the fresh demand by the oil corporation for a $ 5 bn cash call budget in the 2010 budget, Briggs said the long and sustained period of under-funding of Joint Venture (JV) activities between 1996 and 2006 had taken its toll on the current cost profile of the Joint Venture companies, especially in respect of capital cost.
He explained that the increase in the cash call budget for 2010 was meant to maintain enable the JVCs to operate at the desired level of oil production and invest more in exploration to fund and replace oil reserves while undertaking the repair or replacement of the facilities that were destroyed in the heat of the militancy in the Niger Delta region.