Nigeria Raises Crude Oil Production by 65,000bpd to hit 1.25m  Daily Output in June

·      Brent price hits three-month high, exceeds $80 per barrel

Emmanuel Addeh in Abuja

Nigeria’s crude oil production increased marginally in June by 65,000 daily, to hit 1.25 million bpd, but was still markedly far from the 1.742 million bpd target set for it by the Organisation of Petroleum Exporting Countries (OPEC) during the month under consideration.

Data released by the international cartel from its Monthly Oil Market Report (MOMR) yesterday indicated that based on primary communication, the country’s production in June exceeded output in May, which was put at 1.18 million bpd.

Although the country managed to retain its position as Africa’s leading oil producer, with Angola and Algeria still trailing, but it was still a far cry from the 1.69 million bpd projected by the country in the 2023 budget.

THISDAY learnt that output majorly improved at the Qua Iboe, Forcados and Escravos terminals, with production rising from 1.9 million barrels to 4.1 million barrels at Qua Iboe, 5.7 million barrels to 7 million barrels in Forcados and 3.9 million barrels to 4.7 million barrels in Escravos during the month.

However, in all, when condensates, which are excluded from OPEC computation were added, production increased to 1.473 million barrels per day in June, just about 3.14 per cent rise from the 1.42 million bpd drilling in May.

The federal government’s representatives in the sector have continued to shift the goalpost as to when the nation would be able to meet its production quota.

 The latest person to speak on the matter, the Permanent Secretary at the Ministry of Petroleum, Gabriel Aduda, speaking after an OPEC seminar in Vienna, assured that by November this year, the country would have fully ramped up production to the expected 1.742 million barrels daily.

Nigeria has blamed massive oil theft, vandalism of its assets as well as slumping investment in the sector for the slowing oil output which the country has been experiencing for at least three years.

Stakeholders operating in the sector, including the Nigerian National Petroleum Company Limited (NNPC) and Nigeria’s security agencies have at various times admitted the complicity of some ‘bad eggs’ within their folds in the stealing of Nigeria’s commonwealth.

In the second half of last year, the federal government engaged the services of ex-militant, Government Ekpemupolo, alias Tompolo to begin protection of the country’s oil assets in the Niger Delta, when it was becoming obvious that the military alone could not stop the menace.

However, the OPEC data showed that Angola closely followed Nigeria in terms of total oil drilled, with direct communication from the country stating that it produced 1.119 million bpd in June, higher than the 1.111 million barrels per day reported the previous month. It reported an increase of just 8,000 barrels per day during the month.

Also, Algeria self-reported 953,000 barrels per day from 962,000 bpd in May, a reduction of 9,000 barrels per day. Africa as a whole has continued to lag behind in its quota production prompting OPEC to slash their projected output for 2024. Nigeria’s projected output for next year has now been slashed to 1.38 million bpd by the producers’ organisation.

But despite Nigeria’s  inability to gain from it, oil prices continued their rise yesterday to their highest in nearly three months, with Brent crude, Nigeria’s benchmark climbing to $80.56 as at 8pm Nigerian time.

 The session peak was $81.35 a barrel, the highest since April 26, while US West Texas Intermediate crude futures rose 19 cents to $75.94, with the session high at $76.90 a barrel, its strongest since April 28.

Oil prices have rallied by around 12 per cent in the last  two weeks, primarily in response to voluntary supply cuts from top producers Saudi Arabia and Russia, even as indications of a tightening market becomes obvious.

The International Energy Agency (IEA) also predicted Thursday that oil demand would hit a record high this year.

Also yesterday, OPEC lifted its crude oil demand forecast for 2023 to 2.4 million barrels per day, according to the July MOMR, with the cartel’s expectation for this year’s oil demand rising 100,000 bpd from last month’s forecast. 

Global oil demand next year is expected to grow by 2.2 million bpd “on the back of a continued rebound in Chinese economic activity,” OPEC further stated.