March: Nigeria’s oil output growth loses momentum, drops below 1.3mbp
Nigeria’s crude oil production growth dipped to 2.95 per cent month-on-month, in March 2023, to 1,268,202 barrels per day (bpd) from 1,306,304 bpd recorded in February 2023, the latest crude oil production status released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has shown.
The latest figure showed a major slowdown in Nigeria’s crude oil production level, after a six-month upward growth momentum. The country’s crude oil production however returned to below 1.3mpd mark, after making it above that level in February 2023.
It was gathered that the mixture of crude oil, blended and unblended condensates, the output level totaled 1.517 mbpd in March 2023 — down by 2 per cent from 1.548mbpd recorded in February 2022.
This decline of 38,102 bpd was a setback to the country’s prospect of hitting 1.69mbpd, 2023 budget crude oil production target, while also falling short of its OPEC production quota of 1.8 million bpd.
No reason was given by the NUPRC and the Nigerian National Petroleum Company Limited (NNPCL) for the output shortfall, despite gains made in the area of security and host community relations.
It was learnt that the output decline may have occurred due to the elevated political risk anticipated during the February 25, 2023, Nigeria’s presidential and National Assembly elections, as well as 18 March 2023 Governorship and House of Assembly election, processes which seemingly raised major worry for most international oil companies and their indigenous counterparts.
Further check also established that the output decline may have occurred as a result of the shut-in that happened in March, following an explosion on Rumuekpe-Nkpoku trunk line, owned by Petroleum Development (SPD) company of Nigeria Limited, SPDC’s – a section of the Trans Niger Pipeline (TNP) in Rivers State – which was caused by activities of oil thieves.
NNPCL Chief Executive Officer, Mele Kyari had in January said that Nigeria targeted a 20 per cent increase in crude oil production of 1.8 mbpd in 2023, boasting that it was practical for the country to achieve 2.2 mpd output.
This latest development in Nigeria’s output decline is however coming on the backdrop of the voluntary production adjustment announced on Sunday by the Joint Ministerial Monitoring Committee (JMMC) of the OPEC+ group consisting of Saudi Arabia (500,000 bpd); Iraq (211,000 bpd); United Arab Emirates (144,000 bpd); Kuwait (128,000 bpd); Kazakhstan (78,000 bpd); Algeria (48,000 bpd); Oman (40,000 bpd); and Gabon (8,000 bpd) starting May until the end of 2023.
The OPEC JMMC’s decision, it would be recalled, sent oil prices rallying last week to above $80 a barrel after falling to a low of $71.46 per barrel, due to the ongoing banking crisis in the U.S. and Europe, the global economic uncertainty.
