Nigeria’s Oil Production Declines to 1.25 Million Barrels per Day, Reports OPEC.
Nigeria’s daily oil production fell to 1.25 million barrels per day (mbpd) in May, according to a report by the Organisation of the Petroleum Exporting Countries (OPEC). This decline contradicts claims by the Federal Government and the Nigerian National Petroleum Company Limited (NNPCL) that production had increased to 1.7 mbpd.
OPEC data indicated a reduction of 30,000 barrels per day (bpd) from April’s production of 1.28 mbpd to May’s 1.25 mbpd. Despite recent statements from NNPC’s Group Chief Executive Officer, Mele Kyari, claiming production was approaching 1.7 mbpd, the Monthly Oil Market Report for May 2024 from OPEC, based on direct communication with Nigeria, reported a lower figure of 1.42 mbpd from secondary sources.
In April, Nigeria’s oil production had seen a slight recovery, increasing from 1.23 mbpd in March to 1.28 mbpd. The previous decline saw production fall from 1.32 mbpd in February to 1.23 mbpd in March, and from 1.427 mbpd in January to 1.322 mbpd, as per direct sources.
This continuous drop in production has raised concerns among stakeholders regarding the significant revenue loss due to the government’s inability to increase output. Wole Ogunsanya, Chairman of the Petroleum Technology Association of Nigeria, highlighted that Nigeria’s failure to maintain higher production levels was costing the country daily revenues and stressed the importance of retaining a larger portion of the oil and gas value chain within the country.
The Federal Government attributed the production drop to issues with the Trans Niger Pipeline and maintenance activities by some oil companies. Efforts are ongoing to repair the pipeline, with an aim to boost production to 1.7 mbpd of crude oil and condensates, according to Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri.
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In April, Lokpobiri assured that measures were being taken to address the production shortfall and restore levels to previous capacities. He emphasized that resolved issues with the Trans Niger Pipeline would soon lead to an increase in production.
During a recent stakeholder meeting in Lagos, Lokpobiri stated that idle oil wells and licences would be reassigned to capable producers. The NNPC GCEO has repeatedly blamed energy theft and vandalism for the declining output, noting that these issues deter investments in the sector.
To attract investors, the Federal Government announced it would reduce entry barriers to the oil and gas sector, including lowering the signature bonus from approximately $200 million to $10 million.
