Nigeria’s Average Crude Oil Production Rises By 15% In 2023

May 2, 2023 Mary

Crude Oil, Oil Production, Oil — Crude Oil

Nigeria’s Average Crude Oil Production Rises By 15% In 2023

Despite its perennial underproduction in the last two years, Nigeria has been able to ramp up its crude oil output compared to its budget benchmark from an average of about 60 per cent to 75 per cent between H2, 2022 and Q1, 2023, data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has revealed.

THISDAY analysis of production data showed that with a projection of 1.88 million barrels per day crude oil production in the 2022 federal budget, Nigeria under-produced to the tune of over 277 million barrels of the commodity between January and December 2022, leaving average production at 60 per cent.

But with the renewed zeal to tackle oil theft and assets vandalism in the Niger Delta, the country managed has now managed to drill 115 million barrels of the commodity in the first quarter of 2023, raising the average to 75 per cent, a rise of about 15 per cent.

Although an improvement on last year’s drilling, Nigeria has struggled to produce 39 million barrels, 36 .5 million barrels and 39.3 million barrels in the first three months between January and March this year.

However, when condensate, which is excluded from the Organisation of Petroleum Exporting Countries (OPEC) computation is added, the country’s total production for the period jumped to 136.6 million barrels in the first three months of 2023.

But when benchmarked against the OPEC quota of 1.8 million, the production percentage decreased, with Nigeria only able to produce about 70 per cent of its OPEC quota in Q1, 2023.

It is however a significant improvement on the estimated 60 per cent it drilled in most part of 2022 when production fell to a record low.

Most of the oil came from improvements in production from Forcados, which produced 6.8 million barrels, 6.9 million barrels and 5.7 million barrels respectively for the first three months of the year.

But in 2022, the situation was worse, with Nigeria’s crude oil production when put side by side its expected output of 1.88 million barrels per day in 2022, being short by a whopping 283 million barrels, amounting to roughly $24.55 billion.

This figure was arrived at when an estimated conservative price of $85 per barrel for which the commodity sold in the year under review, is multiplied by the 283 million barrels deficit recorded during the period.

With its inability to drill just 60 per cent of its expected volume in 2022, the country lost roughly 40 per cent of its output to oil theft and sabotage as a result of incessant shut-in of planned output for the period.

A review of the NUPRC data covering the whole of 2022, revealed that Nigeria only managed to drill 43.3 million barrels in January, turning out to be the highest output for the year; 35.2 million barrels in February; 38.3 million barrels in March and 36.5 million barrels in April.

It deteriorated to 31.7 million barrels in May; rose marginally to 34.7 million barrels in June, before falling to 33.6 million barrels in July last year.

In August, Nigeria produced 30.1 million barrels, against the 58.2 million barrels projection; followed by September in which Nigeria’s output fell to a multi-decade low of 28.1 million barrels while in October and November, the country drilled 31.4 million barrels and 35.5 million barrels respectively.

Furthermore, when recovery began to set in in December last year, the country managed to drill 38.2 million barrels of oil, cumulating to around 417 million barrels instead of the forecast of 700 million barrels for the year by the federal government.

The year witnessed one of the worst in the history of the country as it consistently failed to meet its OPEC quota. But there has been some recovery as underscored by recent output data.

The immediate past Minister of State, Petroleum Resources, Timipre Sylva, had said Nigeria was working towards meeting its OPEC crude oil production quota of 1.8 million bpd by the end of May 2023. Still , Nigeria has been unable to push out 1.4 million barrels per day, excluding condensate.

Sylva also explained that the federal government would continue to improve security along the tracks of the major crude oil pipelines and block every leakage through which crude oil is stolen by oil thieves and pipeline vandals.

The Nigerian government has recently taken a rash of decisions to tackle the embarrassing oil theft situation in the Niger Delta, hiring local security groups as pipelines surveillance contractors.

Among those handed the security contracts was a firm belonging to a former Niger Delta warlord, Mr Government Ekpemupolo, also known as Tompolo and Pipeline Infrastructure Nigeria Limited (PINL).

In addition, the NNPC has announced that it can now monitor Nigeria’s oil infrastructure in real time with its new automated platform and has inaugurated a whistle-blowers scheme which rewards persons who report the activities of suspected oil thieves to the national oil company.

To underscore how much the country’s oil and gas industry has deteriorated in the last couple of years, in 2011 Nigeria was producing an average of 2.4 million barrels a day, including condensate, but can barely now do 1.6 million bpd, plus condensate which is outside OPEC computations.