Nigeria produces 115m barrels, 75% of budget benchmark in Q1 amid struggling oil output
Amid Nigeria’s crude oil production struggle, the country managed to drill 115 million barrels of the commodity in the first quarter of 2023, a review of industry data has shown.
In all the country’s output was 39 million barrels in January, 36.5 million barrels in February and 39.3 million barrels in March, data sourced from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) indicated.
However, when condensate which is excluded from the Organisation of Petroleum Exporting Countries (OPEC) computation is added, the country’s total production for the period jumped to 136.6 million barrels in the first three months of 2023.
The output during the period when condensate was added was distributed as 46.3 million barrels, 43.3 million barrels and 47 million barrels in January, February and March respectively.
However, when benchmarked against the OPEC quota of 1.8 million barrels per day allocated to Nigeria during the period, the organisation expected the country to produce 162 million barrels as against the 115 million barrels actual output realised.
The country’s production of 115 million barrels instead of the OPEC quota of 162 million barrels thereby left a deficit of 47 million barrels during the period under consideration.
This means that Nigeria was only able to produce about 70 per cent of its OPEC quota in Q1, 2023, but a significant improvement on the estimated 60 per cent it drilled in most part of 2022 when production fell to a record low.
But when measured against the country’s budget benchmark, the actual output figure jumped markedly, hitting 75.6 per cent production of the self-imposed 1.69 million barrels per day in the 2023 budget. This totalled 115 million barrels out of the 152 million barrels expected during the period.
Most of the oil came from improvements in production from Forcados, which produced 6.8 million barrels, 6.9 million barrels and 5.7 million barrels respectively for the first three months of the year.
In addition, Excravos terminal had a relatively stable output during the period, churning out 4.7 million barrels, 4 million barrels and 4.3 million barrels in January, February and March respectively to add a marked improvement in the country’s output profile.
Qua Iboe did not also do badly, producing 4.7 million barrels, 4.1 million barrels and 4.2 million barrels separately in the first quarter of the year.
Bonny also improved with 1.6 million barrels, 2.1 million barrels and 3.2 million barrels production in January, February and March respectively. There was no production at all at the Aje, Asaramatoru, Ajapa, terminals as well as the Anambra basin.
Besides, Oyo, Ukpokiti and Ima did not produce any oil in the first quarter of 2023. No reason was given for this development by the NUPRC.
At the Brass terminal in Bayelsa, production fell from 933,061 to 666,826 between February and March, but rose at the Ọdụdụ terminal from 2.9 million barrels to 3.3 million barrels while Tulja-Okwuibome increased marginally from 1 million barrels to 1.1 million barrels between February and March.
Nigeria has been unable to meet its OPEC production quota for over two years, thereby hobbling the country’s main source of foreign exchange and putting immense pressure on the local currency, the naira, against the American dollar.
The challenge has been mainly attributed to crude oil theft and massive pipelines vandalism in the Niger Delta as well as years of underinvestment in the oil and gas sector.
Erstwhile Minister of State, Petroleum Resources, Chief Timipre Sylva, recently said Nigeria was working towards meeting its OPEC crude oil production quota of 1.8 million bpd by the end of May 2023.
He noted that the inability of Nigeria to meet the current OPEC quota was not due to lack of production capacity on the part of crude oil producers, but because a lot of producers decided not to inject into the pipelines because they were losing a lot of their production to theft and vandalism.
“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,” he stated.
In addition, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mallam Mele Kyari, has stressed that Nigeria’s production issues were peculiar, but noted that the country was surmounting them gradually.
“Nigeria has a different challenge from the rest of the world, as security issues have undermined production.
“For us, we see a trajectory of restoring production, including condensates within the year definitely. And we believe that we can hit our target of 2.2 million barrels per day, although now our OPEC target is 1.8 million bpd. We know that it’s practical to do 2.2 million bpd,” he assured.
