Higher oil output key to Nigeria’s economic growth – Elumelu

The chairman of Heirs Holdings, Tony Elumelu, has underscored the urgent need to boost Nigeria’s oil production to finance economic diversification and national development.

Speaking at the Nigeria Petroleum Industry Leadership Discourse in Abuja on Thursday, Elumelu highlighted the critical role of oil revenues in driving industrialisation, enhancing energy security, and expanding infrastructure.

The event, themed “Nigeria’s Oil Production Growth Roadmap: Acceleration Imperatives”, was organised by Heirs Energies, a subsidiary of Heirs Holdings, to bring together industry leaders and policymakers to strategise on increasing crude oil output.

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Elumelu acknowledged the global shift towards renewable energy but emphasised that Africa’s immediate priority must be ensuring energy security.

He stressed that substantial investment in oil and gas is essential to power industries, support businesses, and provide electricity for households.

While noting the progress made under President Bola Tinubu’s administration, he pointed out that Nigeria’s oil production still lags behind its OPEC quota.

“You know, under Buhari’s administration, production fell below 1 million barrels per day. We are pleased that under the current administration, output has risen to 1.8 million barrels per day. But we are not satisfied with that figure.

“We need to push beyond 2 million barrels because oil revenue is crucial for diversifying the economy and funding national development,” Elumelu said.

He highlighted the importance of increasing oil production to generate foreign exchange, stabilise the naira, and improve national security.

He noted that higher crude oil output would provide the financial resources needed for industrialisation and infrastructure development, particularly in power generation and manufacturing.

As chairman of Transcorp Group, Elumelu revealed that Transcorp Power, one of Nigeria’s leading electricity producers, has a capacity of 2,000 megawatts but is unable to operate at full capacity due to gas supply shortages.

He called for greater collaboration between the government, industry stakeholders, and investors to achieve the country’s target of increasing oil production to 2.5 to 2.7 million barrels per day.

According to him, recent policy reforms and executive orders signed by President Tinubu have improved investor confidence, security, and the overall business climate in the oil sector.

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Elumelu also shared insights into Heirs Energies’ production growth.

He noted that when the company acquired OML 17 from Shell, production stood at 21,000 barrels per day. This has since increased to 53,000 barrels per day, with a target of reaching 100,000 barrels per day.

He expressed confidence that Nigeria can surpass the 2 million barrels per day threshold if all stakeholders commit to expanding production, improving infrastructure, and securing oil facilities.

On the question of refining, Elumelu stated that while Heirs Energies aims to integrate downstream operations in the future, its current focus remains on scaling up crude oil production.

He explained that once a company secures crude oil, the primary raw material, transitioning into refining, fertiliser production, and petrochemicals becomes more feasible.