Sustaining Nigeria’s ranking as top crude oil producer in 2023
The Ranking of Nigeria as the highest crude oil producer in Africa last month, according to the latest monthly oil market report by the Organization of Petroleum Exporting Countries (OPEC) is a welcome development in the energy sector and a challenge to redouble effort by the government to secure pipelines and production platforms against theft and attacks.
The report which was published on Tuesday, January 17, showed that Nigeria produced 1,235 million barrels per day, higher than the 1,186 million barrels per day it produced in November 2022. Based on the data, Angola took second place at 1,088 million barrels per day while Algeria took third place with 1,099 million barrels per day.
According to secondary sources, “total OPEC-13 crude oil production averaged 28.97 mb/d in December 2022, higher by 91 tb/d m-o-m. Crude oil output increased mainly in Nigeria, Angola, Libya and Venezuela, while production in Kuwait, Congo and Algeria declined,” part of the report said.
The year 2022 was challenging for the Nigeria’s oil and gas sector. Crude oil theft intensified around the second quarter to the fourth quarter of the year and this impacted crude oil production output. It was reported at the time, that the Nigerian National Petroleum Company Limited said that on average, the country lost up to 700,000 barrels per day of oil to crude oil thieves.
The Buhari administration has pegged the 2023 budget to a benchmark crude oil production rate of 1.69 mb/d for the year 2023. Though experts at KPMG recently said that to meet up with this benchmark, all stakeholders must effectively activate more hydrocarbon investments in the country and tackle crude oil theft and ensure perpetrators are prevented from engaging in such activities to shore up production rates.
The Group Managing Director of NNPCL, Mr. Mele Kyari and his team should be commended for the rigorous effort put for ensuring improvement in production output.
Beyond the scores aforementioned, the energy Sector of the country is confronted with eyesores regarding miscreants activities (oil thieves) which continue to pose as national threat to the Gross Domestic Product considering the fact that Oil and Gas sector still accounts for 80 per cent of Nigeria’s total national revenue.
The President of the Senate Ahmad Lawan says Nigeria loses one million barrels of crude oil daily to crude theft. He made the remark at the presentation of the 2023 Appropriation Bill to a joint session of the National Assembly by President Muhammadu Buhari in Abuja in October, 2022.
The Federal Government has stepped up its probe into the massive crude oil theft in the Niger Delta, as all those found guilty are going to face prosecution, the Nigerian National Petroleum Company Limited had stated.
The Government posited that the oil company was also working with security agencies and the private firm contracted to carry out pipeline surveillance in the oil-rich region.
In August, it was reported that the Federal Government awarded a pipeline surveillance contract worth N48bn per annum to a firm run by Government Ekpemupolo, popularly called Tompolo, to curb the massive oil theft in the Niger Delta.
Within two months after the contract was awarded, Ekpemupolo announced the discovery of at least 58 illegal points in Delta and Bayelsa states where crude oil was being stolen.
The former leader of the militant group, Movement for the Emancipation of Niger Delta, told journalists recently in Delta State that a 4km illegal oil pipeline was discovered in the Forcados area of the state.
Tompolo revealed over 58 points that have been tapped in both Delta and Bayelsa states. In collaboration with the security agencies he stressed that they are providing intelligence for the security people to assist to do the work.
Also in December 2022, The National Security Adviser, Major General Babagana Monguno (retd.) inaugurated an 11-man Special Investigative Panel to look into cases of oil theft and oil losses in the country.
The panel is chaired by the Interim Administrator of the Presidential Amnesty Programme, Major General, Barry Ndiomu, with Mr David Attah as Secretary.
Speaking during the inauguration Monguno noted that Nigeria was currently facing a monumental loss of revenue that ought to have accrued from the sale of crude oil, being the main source of its foreign exchange earnings.
He pointed out the alarming rate of vandalism and theft of crude oil had led to a significant decline in production, which has impacted the nation’s revenue. The menace of oil theft/losses is completely unacceptable, considering its attendant impact on the economy, national development and security. It is an affront to government and its institutions, which must be tackled without further delay. It is in this connection that the government, worried by the ugly trend, among other things, directed the setting up of a Special Investigative Panel on Oil Theft/Losses in Nigeria to investigate all aspects of crude oil theft, identify the culprits and submit its Report for necessary action.
Setting up Committees and special court alone is not yet Uhuru as the Government must have secret police designated to fish out the Cabals behind oil theft.
All stakeholders in the energy sector in collaboration with security agencies must synergise to drastically put an end to Oil thieves because Nigerians are not happy with the situation. We’re being ranked as the highest producer of crude oil in Africa but we’re still battling with fuel scarcity crisis, poverty and high rate of inflation in the country.
Sustaining reduction in oil theft will only be achieved if there is appropriate payment of pipeline security contractor by the Federal government. This will help to boost confidence of the contractor and the staff.
