Nigeria’s estimated oil output of 468.8 million barrels in the first three quarters of 2022 was just 284.70 million barrels at the end of September according to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The gap between the government’s oil output and its oil benchmark of 1.88 million barrels per day in the 2022 budget suggests that the country only produced almost 60% of its overall expectation for the time.
During the review period, there was still no production from the Asarama, Okwori, Ajapa, Anambra basin, Oyo, Ukpokiti, Ima, and Akp terminals, which further hampered the quantity of oil predicted for drilling in the first nine months.
Aje terminal did not also produce a drop of oil. With a National Assembly-approved benchmark of 58.2 million barrels per month in December 2021, the disparity between actual and anticipated output was a massive 184.1 million barrels of unproduced oil.
Crude production at the Bonny terminal fell dramatically between August and September, from 749,463 barrels to 167,582 barrels; at the Brass terminal, it fell from 270,932 barrels to 172,814 barrels; and at the Qua Iboe terminal, it increased only marginally from 4.79 million barrels to 4.97 million barrels.
Nigeria’s oil industry problems have lately exacerbated, with output falling to a new record low of 937,000 barrels per day in September after reaching a new record low of 972,394 barrels per day in August.
A slew of challenges have hampered Nigeria’s ability to drill enough oil to enhance its urgently needed foreign money, even as the commodity has continued to trade at a seldom seen price near $100.
Despite months of claims of expected improvement by Nigerian officials, output fell below the 1 million bpd level in September, falling by more than 10% from the previous month.
On a daily basis, production in July 2022 averaged 1.083 million barrels per day; in June, production was 1.158 million bpd; in May, it was 1.024 million bpd; in April, it was 1.219 million bpd; in March, it was 1.237 million bpd; in February, it was 1.257 million bpd; and in January, it was 1.398 million bpd.
The quota given by the Organisation of Petroleum Exporting Countries (OPEC) to the country for the month of August was 1.830 million barrels per day, meaning that Nigeria under-produced to the tune of over 853,606 bpd in September.
Although the country has recently taken a rash of measures to curtail the oil theft menace, they so far appear to have defied all solutions, as production has continued to decline.
A few of the steps taken so far by the government include the renewed deployment of security personnel in the Niger Delta and the real-time monitoring of activities around the pipelines by the Nigerian National Petroleum Company Limited (NNPC).
In addition, the national oil firm has introduced the whistle-blower strategy as well as the handing over of a N4 billion monthly surveillance contract to ex-militant, Government Ekpemupolo, popularly known as Tompolo.
The federal government has variously blamed massive oil theft, vandalism of major assets, dilapidated infrastructure as well as declining upstream investment for its inability to drill more of the commodity.
Whereas the monthly production projection in the 2022 budget was 58.2 million barrels given the 1.88 million barrels per day forecast, the actual output for the period told a different story.
A breakdown of the data indicated that there has been a steady decline in production levels. In January, total crude oil production output was 43,353,723 barrels; in February, it was 35,217,997 barrels while in March, production was 38,364,770 barrels.
In April, production fell to 36,576,449 barrels; in May, it fell further to 31,755,488 barrels while in June, July and August, the data showed that output were 34,748,214; 33,600,878 and 30,144,212 million barrels respectively. In September, it further declined to a record 28.1 million barrels.
Speaking on the situation recently, the Group Chief Executive of the NNPC, Mallam Mele Kyari said the increasing rate of vandalism had caused massive disruptions in oil production, noting it was the worst the country had ever witnessed.
“As we speak now, there is massive disruption to our operations as a result of the activities of vandals and criminals along our pipelines in the Niger Delta area. This has brought down our production to levels as low as we have never seen before,” he stated, but added that the company was “not hopeless.”
But Kyari promised that by October ending, some of the lines that had been dormant due to massive damage done by economic saboteurs will be brought back on stream. It’s unclear if that has happened.
Recently, THISDAY reported that with an estimated average oil price of $100 for the month, the country lost over $756 million to shut-ins in August, according to an analysis of data from the NNPC.
Forcados terminal also curtailed supply as a result of the closure of the facility, following reports of a ‘sheen’ in the vicinity of the facility, a number of other facilities have also been negatively impacted. The Forcados asset is operated by Shell Petroleum Development Company (SPDC).
Bonny terminal in the last few months took a hit, with force majeure declared as a result of the shutdown of the terminal. The facility lost a humongous 3.545 million barrels in July.
Nigeria, Africa’s largest oil producer and a member of the Organisation of Petroleum Exporting Countries (OPEC) has tried to stamp out sabotage on its pipeline network in recent years without much success.
