OPEC cut: FG loses over 52m barrels in six months — NNPC
By Uthman Salami
The Nigerian National Petroleum Corporation (NNPC) report has indicated that Nigeria has lost not less than 52 million barrels of crude oil between May and December 2020 to COVID-19 owing to the compulsory supply cuts imposed by the Organisation of Petroleum Exporting Countries (OPEC)
Before the OPEC Cut, Nigeria’s crude oil production level was two million barrels per day (bpd) but latest data from NNPC indicated that while the average daily crude oil production for the entire year stood at 1.775 million bpd, total production for the whole year was 704.741 million barrels.
The data indicated that the highest production level of 2.072 million bpd while during last December, NNPC recorded its lowest production of 1.419 bpd.
The difference on the average level of production of crude oil between January and December, 2020 stood at 652,967 barrels, that is, the highest and lowest production levels.
The figures showed that NNPC fulfilled its pledge to cut production to hit its targeted three million litres, when the pandemic broke out, slashing average daily production to 1.74 million barrels in the first instance in May after the OPEC intervention.
Production further reduced in June to 1.68 million barrels per day on the average, 1.65 million bpd in July and 1.64 million bpd in August.
OPEC had embarked on a coordinated oil production cut by agreeing to cut 9.7 million bpd in an effort to support the market, amounting to about 10 per cent of global oil supply due to the pandemic
However, according to the data from NNPC’s market and production activities, in September, oil drilling further reduced to 1.59 million bpd, but slightly increased to 1.61 million bpd in October before falling again in November to 1.54 million and tumbling in December to 1.419 million barrels.
The Production Sharing Contracts (PSC) portion of the total national output took the lion’s share of oil drilled in 2020, hitting 281.1 million barrels of the total 704.7 million barrels of crude oil produced during the year.
The Joint Venture (JV) agreements yielded 226.5 million barrels, while the Alternative Financing (AF) sources resulted in the production of 75.2 million barrels.
The activities of the National Petroleum Development Company (NPDC), an NNPC subsidiary, resulted in 72 million barrels in the year under consideration, while the independent marginal fields generated 49.6 million barrels in 2020.
The NNPC had set a target of three million bpd oil production before the outbreak with the Group Managing Director of the corporation, Mallam Mele Kyari, stating that the drilling of Kolmani River III well was already ongoing, with a high prospect of finding oil.
The corporation also said seismic data collection was ongoing in the Bida Basin as well as re-launching of exploration work in the Chad Basin, while several alternative funding facilities had been secured for the NPDC to facilitate the development of additional assets.
But that did not materialise as contrary to the projection, the corporation and its partners embarked upon shutting down several platforms to ramp up compliance with the OPEC cuts, which has led to some price stability in the international oil market.
This report by the NNPC also revealed that the NPDC December 2019 to December 2020 cumulative production from all fields totalled 72,029,656 barrels of crude oil, translating to an average daily production of 181,435 barrels per day.
In addition, at an average oil price of $50.78/barrel and exchange rate of N379/$ at the time, the domestic crude oil lifted by NNPC was valued at $382.8 million
The remaining crude oil lifted for export was valued at $24.3 million at an average price of $48.92/barrel, with the total value of crude oil lifted on the account of NNPC in December 2020 being about $407.1 million.
