Nigeria’s Oil Output Jumps 5.7% Y-o-y in First 9 Months of 2023 Amid Switch to Smaller Ships

Emmanuel Addeh in Abuja

Compared to 2022, Nigeria’s crude oil production increased by 5.7 per cent year-on-year between January and September 2023, a THISDAY review of industry data has indicated.

Although still meagre, in terms of the overall plan to raise production, the information from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that the rise between the same period last year and this was about 18.3 million barrels.

The data showed that while total crude oil production for the first three quarters of 2022 was 311.5 million barrels, for same period this year, the figure increased to 329.8 million barrels, indicating a 5.7 per cent rise.

The biggest output for any month for the period was in January 2022, when Nigeria produced 43.3 million barrels of crude oil, while the lowest came in September 2022, with a production of 28.1 million barrels of crude oil.

However, after a long period of flat output from its assets in the region, the volume drilled rose markedly in September 2023, accentuated by the switch in mode of transportation of the commodity.

Overwhelmed by a prolonged inability to ramp up production in the Niger Delta and meet its Organisation of Petroleum Exporting Countries (OPEC) due to incessant vandalism of its pipelines from some of the facilities, the operators have now decided on other means of moving crude oil to the high sea, THISDAY recently reported.

In addition, the authorities, following the underwhelming performance of the sector up until the second quarter of last year, contracted local pipelines surveillance groups, including a firm owned by Government Ekpemupolo, also known as Tompolo, an ex-Niger Delta warlord.

To curb the disruption of its production, the federal government, alongside its partners have now begun the use of tiny tankers  for the transportation of crude oil through the creeks of the Niger Delta, following a protracted inability to fix the often vandalised pipelines in the region.

Specifically, by bypassing the major pipeline in the Nembe Creeks in the Bayelsa axis, the fleet of small river-going tankers has helped boost the country’s OPEC quota, which the country has failed to meet since the Covid-19 pandemic started easing in late 2020.

As a result of its declining production, OPEC recently slashed the country’s quota for 2024 to 1.38 million barrels per day, from this year’s 1.74 million barrels per day. However, Nigeria is now doing everything to convince to review the figure up by raising output .

But despite the recent marginal increase, a THISDAY report penultimate week, estimated that Nigeria’s total losses to underproduction was as high as $3.89 billion in the third quarter of 2023.

The oil, which is now channelled through other means of transportation, previously went by the Nembe Creek trunk pipeline to the Bonny terminal, which is operated by Shell Plc, Bloomberg hinted recently.

That conduit, operated by Aiteo Group and previously running at about 150,000 barrels a day, hadn’t sent oil to Bonny since February 2022 before the switch in the mode of transportation of crude.

Last month, quoting data from the Nigeria Extractive Industries Transparency Initiative (NEITI), Speaker of the House of Representatives, Tajudeen Abbas, said Nigeria lost about $46 billion, that is roughly N16.25 trillion, to crude oil theft in 11 years. The NEITI report, he said, showed that 619 million barrels were stolen during the period 2009-2020.

But an analysis of the NUPRC data revealed that even though Nigeria has attempted since last year to ramp up the volume of crude oil production, it’s still far behind the OPEC target of 1.74 million barrels per day.

Last month, production hit 1.34 million barrels per day, the highest in about 21 months.

A THISDAY computation of the OPEC quota further showed that for the first nine months of 2022 and 2023, Nigeria was supposed to produce 468 million barrels for each of the periods, given a monthly total production of at least 52 million barrels.

 But for the two periods, the country only managed to drill 311.5 million barrels and 329.8 million barrels respectively, underscoring the fact that Nigeria still has a long way to go in seeking to raise production.

The new Minister of State Petroleum (Oil), Senator Heineken Lokpobiri, recently assured that the sole instruction given to him by President Bola Tinubu, is to raise production in the short term. He has now set  a target of 2 million barrels per day by the end of December 2023.

“Our target is to see how we can get to 2 million barrels per day and beyond by the end of the year. The reason why we are underperforming is because of insecurity and we are gradually tackling those problems.

“My sole agenda is to increase production. Once we increase production, we will get more revenue for the country.  Nigeria is still more dependent on oil, so we need to solve our problems and begin to earn enough forex,” he stated during his inaugural meeting with energy correspondents in Abuja weeks ago.