CEM REPORT, ENERGY | The latest crude oil and condensate production report from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has shown that Nigeria’s oil production slumped by 15.5% in July from June production making a third time short fall since 2023.
According to NUPRC report, crude production declined by 167,564 bpd to 1,081,396 barrels per day (bpd) in July 2023 from the 1,248,960 bpd produced in June.
With the condensate combined, the commission’s report said that Nigeria’s oil production fell to 33.5 million bpd in July from June’s 37.5 million.
Nigeria has in recent times consistently failed to meet up with OPEC+ agreement due to several reasons which include pipeline vandalism and oil theft with a lack of investment in capacity due to energy transition. These has made Nigeria the biggest laggard in crude oil production in the OPEC+ alliance.
Earlier this month, OPEC said Nigeria’s oil production decline has made the West African giant the third largest producer in Africa having lowered its output cap of 1.742 million bpd earlier this year to 1.38 million bpd at the OPEC+ meeting in early June, due to its underproduction of more than 400,000 bpd.
Gbenga Komolafe, chief executive at the NUPRC said in May that Nigeria has the technical allowable capacity to produce about 2.5 million barrels of oil per day. He however cited the mentioned challenges responsible for the current production which hovers around 1.5 million. Even this, Nigeria struggle to meet.
“Currently, Nigeria has the technical allowable capacity to produce about 2.5 million barrels of oil per day. However, arising from the highlighted challenges, our current production hovers around 1.5 million barrels of oil and condensate per day,” Gbenga Komolafe said.
According to Oilprice.com, Gabriel Tanimu Aduda, Permanent Secretary at Nigeria’s Ministry of Petroleum Resources, told Energy Intelligence last month, that, Nigeria aims to significantly increase its oil production to up to 1.7 million bpd by November 2023, hoping to win a higher quota in the OPEC+ agreement.
Nigeria’s budget implementation is heavily reliant on revenue from crude oil export, a glaring reason the government has resorted to heavy borrowing to argument budget deficit. Revenue from oil has run slimmer regardless of price performance in the international market due to crude theft that has left production in dismal performance.
The Nigerian government seems to be doing less to identify and prosecute those involved in the act.
On August 16, the Nigerian National Petroleum Corporation (NNPC) Limited secured a $3 billion emergency crude repayment loan from the African Export-Import Bank (Afreximbank). The national oil company said the crude-for-cash funding would sustain the naira and stabilise the foreign exchange market which has witnessed significant volatility in recent weeks.