After Three Years of Consistent Shortfall, FG Fixes November to Meet OPEC Oil Production

*Says 1.74m bpd barrels output achievable 

*May renegotiate 1.38m bpd 2024 baseline 

Emmanuel Addeh in Abuja

After three years of consistent inability to meet its Organisation of Petroleum Exporting Countries (OPEC) crude oil quota, the federal government at the weekend fixed November this year to hit the current 1.74 million barrels per day allocated to it by the international oil cartel.

Speaking in a visual interview with Energy Intelligence on the margins of the just-concluded OPEC seminar in Vienna, the Permanent Secretary of the Ministry of Petroleum, Mr Gabriel Aduda, who currently doubles as the highest ranking official in the ministry, also explained that the 1.38 million bpd baseline recently set for Nigeria by OPEC will be renegotiated.

Since the events following the Covid-19 pandemic in 2020, Nigeria has consistently failed to produce to its quota in the OPEC+ agreement. The country has blamed the combination of pipeline vandalism and oil theft as well as a lack of investment in capacity for the problem.

The failure to ramp up production has made Nigeria the biggest laggard in crude oil production in the OPEC+ alliance as oil majors operating in the country frequently declare force majeure at key crude oil export terminals due to incessant vandalism.
Nigeria’s quota was 1.742 million bpd earlier this year, but due to its underproduction of more than 400,000 bpd, the output cap for Nigeria was lowered to 1.38 million bpd at the OPEC+ meeting in early June.

Also the government has cited a lack of investments, a shortage of funding sources because of the energy transition, and insecurity among the factors driving the situation.

“It’s every country’s dream to be able to cap and max out on production. And that is what Nigeria is doing at the moment. As we speak, we’re capping at about 1.2 million barrels and that is because of the challenges we’re having, especially with security challenges in the Niger Delta and what have you.
“But of course, that doesn’t mean that we are stopping at that because we’re working hard to ramp up production. As you’re aware, we have this year about 1.7 million bpd.

“ So we still have a lot to be able to put together to do that and trust me, we’re putting in place every machinery that we can to ensure that we max out on production.  We’re looking at between now and November to be able to do that” Aduda stated.
The permanent secretary also assured that Nigeria will get a higher baseline for next year, stressing that in the coming months drilling will improve.
 “Definitely, we’re going to get a higher quota, that much we know, because we’re working deliberately towards that. And so we will see in the next few months, you’re going to see a huge ramp-up in production because we’re deliberately working to ensure that that happens,” he added.

Aduda further noted that Nigeria has decided that gas remains the best source of fuel for the ongoing energy transition, maintaining that with its abundant volumes, Nigeria was set to deploy the commodity both for export and local consumption.
“The beauty of what we’re doing is that coming here to this OPEC seminar, one thing is already agreed upon: That natural gas is the transition fuel and now with natural gas, Nigeria has a deposit of natural gas. In fact, much more than we have crude. As we speak, we have 260 TCF confirmed, with a potential for 600 TCF, and that is a lot.

“And of course, we’re discovering natural gas every other day. As you know, Total Energies in Nigeria has just discovered a huge cache of natural gas, so a lot is coming up in that area and we are paying a lot of attention to natural gas as our transition fuel and that means expanding infrastructure, expanding production and accessibility.

“And then of course, we are ramping up on domestic use in terms of Compressed Natural Gas (CNG) and Liquefied Petroleum Product (LPG). We ‘re working with what we have. If it goes higher better for us, but we can make do with what we have and we’re doing very well,” Aduda stated.

He further explained there was hope that the investment that was drying out initially in the oil industry in Nigeria had begun to come into the country gradually.
“I think in this very past week, just before I left Nigeria to come in here, one of the last meetings I had was with one of the International Oil Companies (IOCs) which is coming in and they are bringing in a new multi-billion dollar investment in the sector,” he said.