After Initial Improvement, Nigeria’s Oil Output Slows in January

Nigeria’s oil production grew by a meagre 28,000 barrels per day in January this year, compared to the over 55,000 bpd increase in December, 2022 a THISDAY review of data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has shown.

The figure dampens the initial excitement over what appeared a rebound in the country’s oil output after a long period of steady decline, culminating in a multi-decade low.

The rise in volume of oil drilled by Nigeria came after months of stalling in its crude oil production projection and inability to meet its Organisation of Petroleum Exporting Countries (OPEC) production quota.

But the NUPRC data for the first month of 2023 showed that while production in December was 1.235 million bpd, growing by 55,000 bpd from November, the January production was 1.258 million bpd, a rise by a small volume of 28,000 bpd.

However, when condensates, which are outside OPEC computations are added, the country’s total daily output for the month was 1.494 million bpd, with blended condensates at 48,978 bpd and unblended at 187,180 bpd during the period under review.

When calculated for the entire month of January, Nigeria produced a total of 39 million barrels for the month without condensates and 46.3 million barrels when the low-density oil is added.

As expected, the biggest oil production asset was Forcados, with 6.84 million barrels for the month, followed by Qua Iboe with 4.73 million barrels and Escravos terminal with an output of 4.71 million.

During the month, Bonga’s output was 3.4 million barrels, Egina produced 3.2 million while Odudu (Amenam) produced 3 million barrels. Bonny’s output for the period was 1.61 million barrels for the month.

However, the country’s production per day released by the NUPRC differed markedly from the estimate of 1.59 million bpd announced by the Nigerian National Petroleum Company Limited (NNPC) earlier.

Although still significantly lower than the about 1.8 million bpd OPEC allocation, the January data showed that crude oil production would be the highest production level since March 2022, when the country’s production averaged 1.237 million bpd.

Nigeria has been unable to meet its OPEC production quota for over a year, thereby hobbling the country’s main source of foreign exchange and putting immense pressure on the local currency, the naira, against the American dollar.

In February, March, April, and May 2022 respectively, oil production fell steadily  to 1.25 million bpd, 1.24 million bpd, 1.22 million bpd, and 1.02 million bpd, while in June it rose marginally to 1.15 million bpd, before falling to 1.08 million bpd in July.

In August, the oil sector hit a deadly blow on the Nigerian economy, slumping to 972,394 bpd, and further falling to 937,766 bpd in September, before rising to 1.014 million bpd in October.

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. In collaboration with the security agencies, the firm has announced major breakthroughs in the detection and destruction of illegal refineries and pipelines.

In addition, the NNPC has disclosed that it can now monitor Nigeria’s oil infrastructure in real time with its new automated platform.

Furthermore, it has inaugurated a whistle-blowers scheme which rewards persons who report the activities of suspected oil thieves to the national oil company.

Recently, President Muhammadu Buhari directed the troops fighting the menace in the Niger Delta to halt the massive leakages by May 29, the date he is expected to serve out his eight-year constitutionally guaranteed terms.

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