Emmanuel Addeh in Abuja
Despite the many pledges by the Nigerian authorities to meet the Organisation of Petroleum Exporting Countries (OPEC) production quota in 2023, the country failed do so, although it made appreciable progress in raising crude oil production compared to 2022.
Data released by OPEC and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), analysed by THISDAY indicated that the country ended Q4, last year, with a production deficit of 40 million barrels as compared to the expectations of the producers’ group.
It further showed that Nigeria failed to produce as much as 435,000 barrels per day in the months spanning October to December, a development that contributed to Nigeria’s inability to meet its backlog of foreign exchange obligations.
Overall, Nigeria under-produced its OPEC’s crude oil volume by 32.6 per cent during the quarter under review, producing 120.76 million barrels in the three months under review, instead of the OPEC allocation of 160.2 million barrels.
In Q4, 2023, Nigeria was given a target of 1.742 million bpd by OPEC, but ended up producing 1.351 million bpd in October, 1.250 million bpd in November and 1.335 million bpd in December, according to available data.
In January 2023, the then Minister of State, Petroleum Resources, Chief Timipre Sylva, said Nigeria will meet its OPEC crude oil production quota by the end of May last year.
Sylva 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.
“Once we are able to build enough confidence in the security of the pipelines, they (producers) will then be able to inject into the pipelines once again and once that happens, we will be able to meet our OPEC quotas. That is where we are going and the early signals are there that we are making very good progress.
“Our pipelines have issues and we have put a security structure in place involving the communities, security personnel, oil companies and government and we are beginning to see some early signs of improvement.
“That’s really our plan and I am hoping that before the exit of this administration (May 29), we should be able to meet our OPEC quota,” Sylva stated.
The same month, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mallam Mele Kyari, maintained that Nigeria could hit 2.2 million barrels per day in 2023, without OPEC oil production quota rationing.
The NNPC, in its public utterances, tends to compute condensates, which are outside the OPEC quota as part of the country’s crude oil output.
Nigeria has been unable to meet its OPEC production quota for over three years, thereby hobbling the country’s main source of foreign exchange and putting immense pressure on the local currency, the naira against other currencies.
At the time, Kyari said: “For us, we see a trajectory of restoring production, including condensates within the year (2023) definitely. And we believe that we can hit our target of 2.2 million bpd…we know that it’s practical to do 2.2 million barrels per day (in 2023),” he stated.
But at the end of 2023, the THISDAY review of OPEC and NUPRC data showed that still far from the OPEC quota, Nigeria’s production averaged 1.3 million bpd in the quarter, rather than the targeted 1.742 million bpd.
The 40 million bpd when calculated at a conservative price per barrel of $80 will give a whopping $3.2 billion lost to under-production during the period from October to December 2023.
Whereas OPEC expected Nigeria to produce about 54 million barrels, 52.2 million barrels and 54 million barrels in October, November and December, however Nigeria only managed to drill 41.88 million barrels in October, 37.5 million barrels in November and 41.38 million barrels in December of last year.
Nigeria has variously blamed massive oil theft, assets’ vandalism, outright sabotage and waning investment in the oil sector for its inability to ramp up production to meet the OPEC quota.
The new Minister of State, Petroleum (Oil), Senator Heineken Lokpobiri, has said that 2024 is the year Nigeria will hit its target production output, even though it has now been slashed to 1.5 million bpd by OPEC due to the consistent inability to meet its allocation.
“We are on track with the objective of maintaining and surpassing the quota, especially as we work productively towards resolving all bottlenecks that might pose as hindrances to the objective,” he stated recently.
