Despite FG’s Assurances, Nigeria Records 30m Barrels Production Deficit in 4 Months

Emmanuel Addeh in Abuja

In spite of various assurances by the federal government and the Nigerian National Petroleum Company Limited (NNPC) of meeting the country’s Organisation of Petroleum Exporting Countries (OPEC) quota, Nigeria recorded an estimated 30 million barrels underproduction in the first four months of 2024.

A THISDAY analysis of the latest data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) indicated that whereas Nigeria was meant to produce a revised 1.58 million barrels per day during the period, on the average, output was 1.32 million bpd.

But the figures published by the NUPRC came as a relief because secondary surveys carried out by S&P Global Commodity Insights, Bloomberg and Reuters which track movement of crude oil-carrying ships before the official data showed that Nigeria may have under-produced by as much as 1.5 million barrels in April compared to the previous month.

For instance, an independent survey by S&P Global Commodity Insights showed that the country failed to produce at least 30,000 barrels per day during the month under consideration, to hit 1.5 million bpd deficit. OPEC’s official figures are expected later today (Tuesday).

In April, the NUPRC data showed that Nigeria recorded a volume of 1.28 million bpd, compared to 1.23 million bpd in March. It further showed production of 1.32 million bpd in February and 1.42 million bpd in January this year.

In all, excluding condensates, which are outside OPEC’s computations, the country managed to drill 44.2 million barrels in January, 38.3 million bpd in February, 38.1 million barrels in March and 38.4 million barrels in April.

The data further showed that whereas Nigeria was supposed to record an estimated 190 million barrels in the four months spanning January to April, it could only drill 160 million barrels for the period, indicating a 17.1 per cent deficit.

In November 2023, OPEC+ handed Nigeria a revised 1.58 million bpd oil output target in 2024, lower than Africa’s largest oil producer had hoped for, because the country failed to consistently meet its 1.74 million bpd production target.

The slash in Nigeria’s quota followed a meeting in June last year, where OPEC+ agreed on a complex deal that revised production targets for several members, after which it tasked three consultancy firms – IHS, Rystad Energy, and Wood Mackenzie – with the job of verifying production figures for Nigeria, Angola, and Congo.

Angola has since left the oil producers group because it rejected the new quota allocated to it by OPEC.

However, the Minister of State, Petroleum (Oil), Senator Heineken Lokpobiri, vowed that Nigeria will continue to remain in the organisation, telling journalists in Abuja at the time that the 1.58 million bpd was not sacrosanct and that negotiations would be restarted if the need for a raise in production arose.

After the first quarter of this year, when Nigeria failed to meet its quota, Lokpobiri assured that government’s plan to hit 2 million barrels per day oil production by the end of 2024 was still on track.

He explained that the drop in oil production in the last few months was caused by issues encountered on the Trans Niger Pipeline, coupled with maintenance activities carried out by some oil companies operating in the country.

The minister assured that measures were being taken to address the situation to, not only restore production to previous levels, but to also increase it, announcing that the issues were being adequately addressed, and production was expected to return to its previous levels.

“We anticipate that Nigeria’s oil production, including condensate, which was approximately 1.7 million bpd prior to these developments, will soon be restored.

“…The quickest way to solve our economic challenges is through the oil and gas sector…If we ramp up production and we reduce the level of oil theft and pipeline vandalism, we will be able to raise the requisite money to be able to fund not only our budget, take care of our forex problems and then ensure that we stabilise our economy,” he stated.

But the latest data showed a steady decline of oil production from the Bonny terminal, falling from 6.3 million barrels in January to 4.6 million barrels in February and 4.2 million barrels and 4.1 million barrels in March and April respectively.

In Brass, production decline was also witnessed, with output falling from 735,360 barrels in January to 647,053 barrels in April.

The story wasn’t different in Forcados terminal where total volume of oil drilled reduced from 7.7 million barrels in January to 6.2 million barrels in April. Also, at the Excravos terminal, output declined from 4.1 million barrels in January to 3.8 million barrels last month.

There was no production at all at Aje, Okono, Asaramatoru, Ukpokiti, and Ima terminals/streams, while drilling at the Sea Eagle terminal resumed, hitting 374,352 barrels during the period, after it produced zero barrels the previous month.

Still in April, the data showed that when condensate is added to daily oil production, output jumped from 1.28 million bpd to 1.44 million bpd in April, compared to a total of 1.43 million bpd recorded  in March, 1.53 million bpd in February as well as 1.6 million bpd in January.

Despite massive spending to curb insecurity in the Niger Delta by the NNPC and the federal government, oil theft, assets vandalism and outright sabotage are rampant in the area where Nigeria extracts its oil from.

The country currently has a multi-billion naira contract with local security groups in the region aside the huge spending on the official security agencies deployed to curb the menace in the area.

Nigeria’s projected oil production in its budget this year is about 1.78 million bpd, with a benchmark price of $77.96 per barrel. It’s unclear where the federal intends to get funding to close the huge gap between projected and actual production.

In February last year, the NNPC’s Group Chief Executive, Mele Kyari, said that it wouldn’t take rocket science for Nigeria to hit 1.8 million bpd mark.

“We have a line of sight to recover to the quota level of 1.8 million bpd. I know that it is not far away, probably two to three months maximum, but we will be there and that will bring back partners to invest, return the confidence of our investors and ultimately bring back growth,” he said at an event in Abuja.

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