Nigeria’s self-reported crude oil production figures to the Organisation of Petroleum Exporting Countries (OPEC) was underwhelming in February, but rose 9 per cent year-on-year, a THISDAY review of data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has shown.

Production was curtailed in almost all of the country’s oil terminals including; Bonny, Brass, Qua Iboe, Forcados, Excravos, Odudu, Tulja-Okwuibome, among several others.

But despite the fall in output from 1.42 million barrels per day in January to 1.32 million bpd in February, year-on-year, an analysis of historical data from the NUPRC showed that total combined output for January and February rose from 75.44 million barrels in 2023 to 82.55 million barrels in the same period this year.

A breakdown indicated that while Nigeria only succeeded in drilling 39.26 million barrels and 36.18 million barrels in January and February respectively last year, it however produced a higher figure of 44.44 million barrels and 38.34 million barrels in the first two months of this year.

However, Nigeria’s reduced output in February through direct communication did not come to industry observers as a surprise.

The Chairman of Shell Companies in Nigeria and Managing Director of Shell Petroleum Development Company (SPDC), Osagie Okunbor, had warned that despite the rising oil output in Nigeria, production still remained fragile.

Speaking at the recently concluded Nigerian International Energy Summit (NIES) in Abuja, specifically on February 29, Okunbor stated that at least seven vandalised points had been discovered on the critical Soku line around Rivers state in February, which may negatively impact production for the month.

Recall that in the heat of the Niger Delta Avengers’ attacks on pipelines in the region in 2016, they had also blown up the Bonny-Soku export line, citing the need for increased attention from the federal government.

Okunbor stated that while the NUPRC and the Nigerian National Petroleum Company Limited (NNPC) should be lauded for the noticeable improvement in export figures, especially in January, they must not let their guards down.

“January (2024) was good. In that month, we supplied the highest quantity of gas to NLNG, 1.7 Bscf/d, compared with our contractual 1.8 Bscf/d. That is the highest we have achieved in any month in the last three years.

“Again, I thank the NUPRC and the NNPC, but we should not rest. Things have started to unravel. In February, we woke up to learn of seven vandalised points on the Soku line,” he added.

Oil theft and oil assets’ vandalism remain Nigeria’s biggest problem in the industry in the immediate term, with the NNPC repeatedly saying that without additional investment, it could hit over 2 million bpd immediately from February’s 1.32 million bpd, if the menace is halted or reduced to the barest minimum.

“It is very obvious that despite all the integrity issues with our pipelines and our facilities, we have capacity beyond 2 million barrels per day without doing anything.

“But today, we are struggling to meet the budget estimate of 1.6 million bpd. The core issue here is that no one will produce oil, knowing full well that he cannot dispose of it, and that’s why no one is putting money into it.

“In 2022, it became so obvious that if something dramatic was not done, we were going to run into trouble. On a specific date, our production came down to as low as 1.1 million barrels per day. And on a particular date, we went below a million barrels,” NNPC’s Mele Kyari told federal lawmakers last week.

However, the latest NUPRC data showed that in Bonny, oil production fell sharply in February to 4.60 million barrels from 6.35 million barrels in January, while in Brass terminal, it slumped from 735,680 barrels to 617,189 barrels for the same period.

In Qua Iboe, the story was not markedly different, as drilling slumped from 4.25 million barrels to 3.66 million barrels, same in Forcados, where crude production fell from approximately 7.8 million barrels to 6.8 million barrels during the period under review.

Besides, Excravos saw a reduction in output from 4.17 million barrels to 3.68 million barrels, whereas in Odudu, it fell from 2.93 million barrels to 2.72 million barrels in January and February respectively.

Also, in Tulja-Okwuibome, output was curtailed to about 1.73 million barrels in February from 1.76 million barrels in January. However, these figures exclude condensates, which are outside the computation of OPEC.

Nigeria currently faces a foreign exchange market crisis, worsened by the reducing inflow of FX due to the country’s inability to markedly ramp up export of its crude oil and gas, which account for over 80 per cent of its FX earnings.

Although Nigeria has over the years attempted to diversify its sources of revenue with some success locally, however, it has not made remarkable progress in expanding its FX sources and thereby still relies heavily on proceeds from oil sales.

Source- This Day Newspaper.