Nigeria’s oil production rises 5.07% to 1.388mbd in Q1
Nigeria’s daily crude oil production in the first quarter of 2022 rose by 5.07 percent to 1.388 million barrels compared to 1.321 million barrels produced daily in the fourth quarter of 2021.
According to the latest data released by the Organisation of Petroleum Exporting Countries (OPEC) in its Monthly Oil Market Report, Nigeria reported daily crude oil production of 1.238 million in March, 1.258 million barrels in February and 1.399 million barrels in January.
The data showed that oil production in the country in the first quarter consistently failed to meet the 1.73 million barrels per day quota set by OPEC for Nigeria.
Nigeria pays high price for oil theft
Nigeria’s failure to boost crude oil production in the face of high price of oil in the international market has been largely blamed on high oil theft and pipeline vandalism in the Niger Delta region.
According to the industry operators, the rising level of pipeline vandalism and oil theft has left the sector struggling for survival.
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Limited, Mallam Mele Kyari revealed earlier in April that oil production has crashed to 1.15 million barrels per day.
He said the increasing rate of vandalism has caused massive disruption in oil production, noting it was the worst the country has ever witnessed.
According to him, “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 and this kind of engagements, the certifications that we have today around our systems and processes should be able to respond to this and part of the response is to bring in the best framework possible to contain the situation”.
Also speaking on the situation, 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 Commission disclosed that most of the crude oil losses came from Bonny Terminal Network, Forcados Terminal Network and Brass Terminal Network.
The Chief Executive of NUPRC, Engr. Gbenga Komolafe said the government was determined to end the menace so that the country can benefit from the rising price of oil and also to protect the environment from oil spills.
According to him, “the issue of oil theft has become a very worrisome issue to the government of Nigeria and I believe to you as investors too”.
Engr. Komolafe stressed that it was important that the government and the oil companies’ work together resolve the issue especially on the agreed volume of oil lost to vandals as the issues strike at the heart of Federation revenue”.
The International Oil Companies (IOCs) operating the country have however pointed out the issue has gone beyond mere oil theft to organized crime.
According to the Chairman/Managing Director of ExxonMobil, Richard Laing, their position was based on the sophistication of the operation of the vandals.
He said: “As an industry, I know how hard my colleagues work to produce products that we need and to suffer the level of theft that we have is disheartening. But more importantly it is a threat to investments, a threat to the health of the industry and wealth of the nation
“It is important that the stakeholders integrate their activities and their thoughts. As OPTS we have met with a number of stakeholders over the last several months and we want to make sure that whatever we do is joined up and effective.
“The language is very important and I think we use theft rather quickly. I don’t think this is theft, this is organized criminal activity. The level of sophistication in terms of tapping into the pipelines, the distributions, efforts required to move hundreds of thousands of barrels a day isn’t some guy coming along and taping into a pipeline and taking container crude oil. It is organized criminality”, Laing stressed.
On its part, the Independent Petroleum Producers Group (IPPG) disclosed that about 82 percent of its oil production was stolen in the month of February 2022.
The Managing Director of Waltersmith Petroman, Chikeze Nwosu opined that the independent producers were facing existential threat.
Nwosu explained that the oil theft challenge has grown from what it used to be in the past of about 4 percent to a high of 91 percent in December, 2021.
According to him, “The TNP (Trans Niger Pipeline) is the major issue. We have seen crude theft grow from single digit percentages to reports of 91 percent in December for some of the operators who produce into the TNP, 75 percent in January and the February report we got has an average of 82 percent”.
He pointed out that the situation seems to be getting worse despite all effort to curb it. He therefore called for urgent action from the government and stakeholders.
