Nigeria missed its crude oil output target for January 2022, pumping 1.46 million barrels per day against a target of 1.683 million bpd as approved by the Organisation of Petroleum Exporting Countries.
Officials of the Federal Ministry of Petroleum Resources and the Nigerian National Petroleum Company Limited said the country’s continued inability to meet its output target had caused the repeated plunge in oil earnings, leading to the monthly drop in the NNPC’s remittances to the Federation Account.
However, they associated Nigeria’s lengthened inability to meet its OPEC production quota to the spate of oil pipelines vandalism, delay in the full implementation of the Petroleum Industry Act, among others.
Some international oil companies were already developing cold feet with respect to investing in the upstream oil business before the PIA was consented to by the President in August 2021.
It was, learnt that the President’s assent to the PIA gave confidence to some of the IOCs.
But government officials explained that the drag in the implementation of the PIA coupled with the recent suspension of petrol subsidy removal and a possible amendment of the Act, were currently influencing negatively on the sector.
These factors, according to experts and senior government sources, are contributory to the inability of Nigeria to meet its OPEC crude oil production target.
Nigeria is a strong and long-standing member of OPEC. A document obtained om from the 13-member organisation, which was a Reuters survey of OPEC crude oil production for January 2022, showed that the country’s output last month was below the OPEC accepted crude oil production target.
It was observed that Nigeria’s 1.46mbpd production in January was slightly higher than its 1.41mbpd December 2021 output, but the survey pointed out that OPEC struggled to pump at target due to the inability of members to meet their targets despite the rise in oil prices.
In this same vein, the survey indicated that the OPEC output in January this year rose by 210,000 barrels per day over the December 2020 production, adding that Angola and Nigeria were among the producers that could not meet their targets.
It stated that OPEC’s oil output in January again undershot the increase planned under a deal with allies, highlighting some producers’ struggle to pump more even as prices trade at a seven-year high.
“OPEC pumped 28.01 million barrels per day in January, up by 210,000bpd from the previous month but short of the 254,000bpd increase allowed under the supply deal,” the document read in part.
Stating on the factors restricting Nigeria’s ability to meet its OPEC quota, an official of the NNPC, who pleaded not to be named due to lack of authorisation, said, “Vandalism, oil theft and the impact of COVID-19 are affecting our production capacity.
“However, it is important to state that with energy transition globally, the IOCs are not very keen in increasing crude oil production. Although this is a global issue.”
Further on the matter, a worthy source at the FMPR disclosed that the oil production slump also affirmed the monthly fall in remittances to the Federation Accounts Allocation Committee by the NNPC.
“This is despite rising crude oil prices, which crossed $90 per barrel recently.”
