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Nigeria’s Projected Crude Oil Production Short by 283m Barrels, $24.5bn Revenue in 2022
Emmanuel Addeh in Abuja
Nigeria’s crude oil production when put side by side its expected output of 1.88 million barrels per day in 2022, was short by a whopping 283 million barrels, amounting to roughly $24.55 billion, a THISDAY analysis has shown.
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.
A further review indicated that while the 2022 budget projected a 1.88 million bpd, that is about 58.28 million barrels every month or an estimated 700 million barrels for the entire year, only 417 million barrels were drilled for the entire year. This represented about 59.57 per cent output for the year.
But on the upside, although the National Assembly pegged the price benchmark at $57 per barrel, oil sold far more than that in 2022, even exceeding $100/barrel at some point.
The THISDAY computation was derived from the figures released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) from January to December last year.
With its inability to drill up to 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 last year, 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.
However, the crude oil production figures exclude condensates which are not included in the Organisation of Petroleum Exporting Countries (OPEC) calculation. In 2022, OPEC’s daily production allocation averaged 1.8 million bpd.
Last year witnessed one of the worst in the history of the country as it consistently failed to meet its OPEC quota. However, with the recent concerted effort to end oil theft in the country, there has been some recovery as underscored by the December output data.
Earlier this month, the Minister of State, Petroleum Resources, Timipre Sylva, said Nigeria was working towards meeting its OPEC crude oil production quota of 1.8 million bpd by the end of May 2023.
He 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.
But after months of stalling, Nigeria appears to be steadily on its way to meeting its OPEC production quota, hitting 1.235 million barrels per day in December.
However, the figure differed markedly from the production of 1.59 million bpd announced for the month by the Nigerian National Petroleum Company Limited (NNPC) earlier and the 1.35 million bpd by a Bloomberg survey.
In January 2022, out of the expected 1.88 million bpd production figure, 1.39 million bpd was drilled. 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 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.