Nigeria’s oil production, including condensate, dropped Year-on-Year, YoY, by 14.3 per cent to 1.4 million barrels per day, mbpd in the first half (January – June) 2022, from 1.6 mbpd in the corresponding period of 2021, according to the Oil Production Status Report of the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, obtained by Vanguard.
The oil output also dropped Month-on-Month, MoM, by 23 per cent to 1.3 mbpd in June 2022, from 1.7 mbpd, recording in the preceding month, May 2022.
This shows about 400,000 barrels per day, bpd, shortfall against the 1.88 mbpd, output benchmark in the 2022 budget.
Although the nation has not been doing well in terms of volume, there were indications that it might be earning more as the price of its Bonny light has been hovering at over $100 per barrel in the past few months as against $62 budget benchmark.
The report did not provide reasons for the nation’s low performance, but investigations by Vanguard attributed the underperformance to increased pipeline vandalism, oil theft and illegal refining in the Niger Delta.
In its latest briefings, Shell Petroleum Development Company, the nation’s highest oil producer, had blamed decline in its 2021 output on “heightened security issues, such as crude oil theft and illegal oil refining.”
Commenting on the development recently, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Limited, Mallam Mele Kyari, indicated that the situation may have worsened as the output nose dives further.
He stated: “As we speak now, there is massive disruption to our operations as a result of the activities of vandals and criminals along our pipelines in the Niger Delta area. This has brought down our production to levels as low as we have never seen before.
“Today, we are doing less than 1.15 million barrels per day simply because some criminals decided that they should have some infractions on our pipelines. That is clearly the biggest form of business disruption that we are facing today.”
Similarly, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), disclosed that about $3.27 billion worth of oil has been lost to vandalism in the past 14 months.
The Chief Executive of NUPRC, Engr. Gbenga Komolafe, said: “A major consequence of this nefarious activity is the declaration of force majeure at Bonny Oil & Gas Terminal, BOGT and shut-in of wells from fields evacuating through the Nembe Creek Trunk Line, NCTL and the Trans Niger Pipeline, TNP. A consequential effect of this menace is that the nation only achieved about 60 percent compliance with Technical Allowable Rate, TAR and 72 percent of its assigned OPEC quota.”
“The challenges that stem from this issue include, threat to national and energy security; Erosion of global competitiveness and ease of doing business; Rise in unemployment across the industry; Increase in conflicts due to proliferation of arms; Widespread HSE and community concerns etc”.
Source:https://www.vanguardngr.com/2022/07/nigerias-oil-output-drops-14-3-to-1-4m-bpd-report/