Wednesday, July 21, 2010

Nigeria's Oil Co: Now Produces 2.2 Million Barrels Of Crude A Day.

IBADAN, Nigeria -(Dow Jones)- Nigeria's state oil company said Tuesday that it is currently producing 2.2 million barrels of crude a day in all its operations.

"Production of crude oil has rebound with the amnesty and post-amnesty policy of the federal government," Austen Oniwon, group managing director of the Nigerian National Petroleum Corp., or NNPC, said in a statement.

He reiterated that the NNPC was solvent enough to meet all its business obligations to Nigerians and its numerous investors.

Last week, a junior minister said the NNPC was insolvent, but this was promptly denied by the government.

The NNPC is in a joint venture partnership with international oil companies operating in Nigeria including Royal Dutch Shell Plc (RDSA), Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX).

Armed militants in the oil-rich Niger Delta, where nearly all of Nigeria's crude oil is produced, attacked and destroyed oil and gas facilities between 2006 and 2009, cutting the country's output by around 1 million barrels a day, according to officials. An amnesty declared for the militants by late Nigerian President Umaru Yar'Adua stemmed unrest in the region, allowing oil companies to step up oil prospecting and production.

Oniwon said efforts were under way to reposition NNPC. The Nigerian government plans to turn the corporation to an independent business concern that will operate like other oil companies in Europe, the U.S. and Asia.

Nigeria relies on oil production for over 90% of its foreign exchange earnings and about 80% of government revenue.

-By Obafemi Oredein, Dow Jones Newswires; 234 2 7510489

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