In March of this year, Nigeria’s crude oil production fell for the first time in six months, and for the first time since output nearly fell to 900,000 barrels per day in September of last year, according to a THISDAY review of new data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
In March, the country’s production decreased to 1.26 million bpd, a decrease of 2.9% from the over 1.33 million bpd recorded in February.
The figure released by the nation’s upstream regulatory agency differed significantly from a previous Reuters survey, which indicated that Nigeria was close to achieving its 1.6 million barrels per day target by the first quarter of 2023.
While the Organization of Petroleum Exporting Countries (OPEC) production allocation to Nigeria remains at approximately 1.8 million barrels per day (bpd), the country’s output in February was approximately 1.3 million bpd, which was still below the cartel’s expectation.
However, when condensates that are not included in OPEC’s monthly calculations are included, Nigeria’s production during the month decreased from 1.547 million bpd to 1.517 million bpd.
However, production decreased to 1.26 million bpd in March and 1.25 million bpd in January, according to data from the industry regulator.
In the past two years, Nigeria has been unable to fulfil its OPEC production quota due to crude oil theft in the Niger Delta. It has taken steps in recent months to halt the leaks by deploying both federal and local security forces to combat crime.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, have agreed to reduce production at the end of 2022 in order to stabilise the market as the economic prognosis deteriorates and prices decline. Some cartel members, excluding Nigeria, resolved last week to cut production voluntarily in an effort to boost falling prices.
Reuters reported earlier in the month that Nigerian production posted the largest increase among OPEC members in March, bringing the country closer to its goal of increasing output to 1.6 million bpd this quarter.
It is unknown what precipitated the decline in Nigeria’s overall oil production, but on the early morning of March 3, a pipeline detonation was reported in a Rivers State community, resulting in the deaths of at least 12 people.
According to reports, the pipeline incident occurred in the Rumuekpe community in the Emuoha Local Government Area of Rivers State after vandals tampered with a crude oil pipeline in the community.
After OPEC and its allies, known as OPEC+, unexpectedly announced additional oil production limits of over 1.16 million bpd, oil prices rose from $74 per barrel to $85 per barrel, bringing optimism to Nigeria.
With a production benchmark of 1.69 million barrels per day (bpd) in the 2023 budget and a price tag of $75 per barrel, Nigeria has struggled to meet its OPEC output quota, thereby impeding Nigeria’s ability to execute a budget surplus in 2023.
Mr. Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), stated last week that the company had spent enormous quantities to reduce oil theft in the Niger Delta.
President Muhammadu Buhari also gave security personnel operating in the region until May to eliminate crude theft and vandalism as a threat.