Nigeria’s OPEC Oil Output Reaches 276.6m Barrels in Seven Months, Deficit Hits 55m Bbls
Emmanuel Addeh in Abuja
Nigeria managed to produce a total volume of 276.6 million barrels of crude oil in the first seven months of 2024, but recorded a deficit of circa 55 million barrels during the period under review, THISDAY has found.
This means that out of 331.8 million barrels, which the Organisation of Petroleum Exporting Countries (OPEC) expected Nigeria to add to global oil supply, the country was only able to produce 276.6 million barrels, an undersupply of 55.1 million barrels or over 18 per cent.
In June last year, OPEC+ cut Nigeria’s output target for 2024 to 1.38 million barrels per day from 1.74 million bpd for 2023, reflecting the fact that for years Nigeria had failed to meet its targets.
The group, however, agreed to give Nigeria a 2024 quota of 1.58 million bpd, subject to independent verification that it could really pump that much, after the country protested the figure.
But analysis of data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) indicated that Nigeria produced 44.2 million barrels of crude oil in January; pumped 38.3 million barrels of oil in February and 38.1 million barrels in March this year.
In April, total production was 38.4 million; in May, 38.8 million barrels were pumped and 38.3 million barrels were achieved in June while the latest released data for July production was 40.5 million barrels too climb to 276.6 million barrels.
According to the upstream regulator’s figures, Nigeria produced an average of 1.43 million barrels of crude oil per day in January, the highest this year, while in February, output dropped to 1.32 million bpd, further reducing to 1.23 million bpd in March.
In April, crude oil appreciated marginally to 1.28 million bpd before falling again to 1.25 million bpd in May, then rose marginally to 1.28 million bpd in June, while in July it was 1.3 million bpd.
But despite the appreciable rise in crude oil production recent months, the country is yet to meet its OPEC quota of 1.58 million bpd.
However, OPEC does not calculate condensates, which when added saw Nigeria’s total volume of oil rise to 1.533 million bpd in July.
Recently, the Minister of Petroleum Resources (Oil) Senator Heineken Lokpobiri, stated that the country was aiming to reach a daily production of 2 million barrels by 2025.
Nigeria blames massive oil theft; pipeline vandalism as well as outright theft of its oil for its inability to meet its OPEC quota and by extension satisfy its aspiration to raise output considerably.
The country is desperately in need of FX to boost the value of the Naira compared to the dollar, a yearning that has remained largely hobbled due to underproduction of crude oil.
But despite the continuing target of 2 million barrels of daily production by the authorities, uncertainty continues to surround Nigeria’s production figures, following its inability to raise output significantly for months.
Aside prolonged lack of investment in the oil sector, Nigeria blames its inability to raise oil output on massive theft as well as outright sabotage.
During the seven-month period, most of the production came from Bonny, Brass, Qua Iboe, Forcados, Escravos, Odudu, among others.
When condensates are added, the data showed that its production exceeded 200, 000 barrels per day from January to July this year, to significantly boost output.
At the recently concluded Nigeria Oil & Gas Conference and Exhibition (NOG) in Abuja, the Nigerian National Petroleum Company Limited (NNPC), said it was declaring a state of emergency on the sector due to Nigeria’s persistent inability to meet its OPEC production.
“We have declared war on the challenges affecting our crude oil production. War means war. We have the right tools. We know what to fight. We know what we have to do at the level of assets. We have engaged our partners. And we will work together to improve the situation,” NNPC’s Mele Kyari said.
Many oil wells continue to be shut in as producers find it difficult to take them to the terminals, with either old or vandalised pipelines.
The country had also recently resorted to the use of barges in a desperate effort to raise production in the country, which still gets up to 85 per cent of all foreign exchange earnings from the commodity.
In spite of the lack of capacity to meet OPEC production quota, Nigeria’s crude oil production increased by 16.7 million barrels in the first six months of 2024, compared to the same period last year, a THISDAY analysis of data from NUPRC showed.
Although still significantly lower than the expected production during the period, this was a 7.3 per cent growth in crude oil production put side by side the output for 2023.
At an estimated average Brent crude oil price per barrel of $85 in 2024, it showed that the country may have made an additional gross amount of $1.41 billion compared to the same period last year.
But despite the improvement, it was still not enough to drag Nigeria out of its economic woes as the country continues to borrow to counter the prolonged reduced foreign exchange inflow into the economy.
Nigeria gets over 80 per cent of its foreign exchange earnings from the export of crude oil and is therefore highly negatively impacted by either falling crude oil production or prices in the international market.
For a long time, crude oil prices have stabilised at over $80 per barrel, but Nigeria has failed to markedly raise output during the period.
To reduce oil theft, the Minister of State, Petroleum Resources (Oil), Lokpobiri, announced recently that the federal government had awarded contracts to ensure the full metering of Nigeria’s 187 oil flow stations as well as a software to track the movement of Nigeria’s oil in the high seas.
“As part of our steps to ensure that we have proper accountability, the Federal Executive FEC approved the metering of all our production. And we have 187 flow stations in the country, littered across the Niger Delta area, so that we will be able to properly account for what we produce and what we export,” he said.
