Despite its perennial underproduction in the last two years, Nigeria was able to increase crude oil output compared to its budget benchmark from 60% to 75% between H2 2022 and Q1 2023, according to data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
With a projected crude oil output of 1.88 million barrels per day in the 2022 federal budget, Nigeria under-produced by almost 277 million barrels between January and December 2022, leaving average production at 60%.
However, with a renewed zeal to combat oil theft and asset vandalism in the Niger Delta, the country has 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.
Despite an increase over last year’s drilling, Nigeria failed to produce 39 million barrels, 36.5 million barrels, and 39.3 million barrels in the first three months of this year, from January to March.
When condensate, which is not included in the Organisation of Petroleum Exporting Countries (OPEC) calculation, is included, the country’s total output for the time jumps to 136.6 million barrels in the first three months of 2023.
When compared to the OPEC quota of 1.8 million, Nigeria’s production percentage fell, with the country only able to produce about 70% of its OPEC quota in Q1 2023.
It is, however, a significant improvement over the estimated 60% it drilled in most of 2022, when production fell to a record low.
The majority of the oil came from increased production at Forcados, which produced 6.8 million barrels, 6.9 million barrels, and 5.7 million barrels in the first three months of the year, respectively.
However, in 2022, Nigeria’s crude oil production fell short by 283 million barrels, amounting to approximately $24.55 billion, when compared to its expected output of 1.88 million barrels per day in 2022.
This amount was calculated by multiplying the 283 million barrels deficit reported throughout the time by an anticipated conservative price of $85 per barrel for which the product sold in the year under consideration.
With just 60% of its planned amount of drilling completed 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 study of NUPRC statistics for the entire year 2022 found that Nigeria only drilled 43.3 million barrels in January, which turned out to be the greatest output for the year; 35.2 million barrels in February; 38.3 million barrels in March; and 36.5 million barrels in April.
It fell to 31.7 million barrels in May, then slightly increased to 34.7 million barrels in June before dipping to 33.6 million barrels in July last year.
In August, Nigeria produced 30.1 million barrels, compared to the projected 58.2 million barrels; in September, Nigeria’s output plummeted to a multi-decade low of 28.1 million barrels; and in October and November, Nigeria 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.
