Connect with us


Tackle oil theft, low investment to meet 1.69mb/d oil production in 2023 — KPMG to FG



Experts at KPMG Nigeria have reviewed the expected oil production rates for the year 2023 and they think the goal can be met if only these issues are tackled by the government.

The Regional Senior Partner (Nigeria and West Africa), Tola Adeyemi at KPMG have said that outgoing and incoming government administrations need to tackle crude oil theft and low investments in the sector by oil producers to achieve the 1.69 million barrels per day crude oil benchmark in the 2023 budget.

He stated this on Tuesday, January 10 while presenting the KPMG Budget Day programme on Arise TV.

He said,“Achieving this level of production is going to require tackling the issue of oil theft and investments in the oil sector by the oil producers.

“This is KEY and is something that both the outgoing and incoming administrations will need to address.

“Total non-oil revenues exceed oil revenues, which is good because it speaks to the diversification of the economy, but it also suggests underperformance by the oil sector.

“When we unpack the oil revenues further, we see that they are based on certain assumptions. One important assumption is the level of oil production. The estimated oil production for the year 2023 is 1.69 million barrels per day. This is big considering where we are coming from which is about 1.2 million barrels per day.”

Also commenting on the benchmark oil production rate, Adewale Ajayi, a partner at KPMG Nigeria, said 1.69 million barrels per day is reasonable. According to him, some factors will determine global crude oil prices and production, which will, in turn, affect Nigeria’s production.

He said, “What is going to happen with the ongoing Russia-Ukraine war, and how long is it going to last, of course, we need to consider the reaction of the Organization of Petroleum Exporting Countries (OPEC) to challenges facing the oil sector.

“Also, is the global oil market going to have a buyer cartel? Looking at these factors, I think it is clear that the global oil market is in deficit so we expect that there will be a reduction in oil supply but it will not be enough for OPEC to change its production per day.”

Ajayi explained that the Nigerian government has made some efforts to tackle security issues that hampered crude oil production in 2022. Now, the country’s current oil production has gone up to 1.2 million barrels per day.

He, however, stated that although Nigeria is still unable to meet the 1.8 million barrels per day OPEC quota, things are currently looking up, and oil companies now feel confident enough to inject more oil into terminals/pipelines.

Tola Adeyemi in his presentation also highlighted the fact that fuel subsidy payments removal will require courage and political will on the part of the next administration following the outcome of the forthcoming general elections in February 2023.


NUPRC affirms Nigeria’s Oil production fall by 2.8m barrels in March



The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) over the weekend confirmed the data from the Organisation of Petroleum Exporting Countries (OPEC), which revealed a decline in Nigeria’s oil production for the second consecutive month this year.

Data on crude drilling operations for March from the NUPRC showed that production fell from 1.42 million barrels per day in January to 1.32 million bpd in February, before slipping to 1.23 million bpd in March.

In the report Nigeria may have lost as much as 2.8 million barrels in the entire month of March, that is roughly 90,000 bpd during the period under review.

The Minister of State, Petroleum Resources (Oil), Senator Heineken Lokpobiri, last Friday acknowledged the country’s declining crude oil production after an initial rise in recent months.

In a statement by his Special Adviser on Media and Communications, Nneamaka Okafor, the Minister assured that measures were being taken to address the situation, not only to restore production to previous levels but to increase it sustainably.

Lokpobiri stated that the slump was primarily due to issues encountered on the Trans Niger Pipeline (TNP), coupled with maintenance activities carried out by some oil companies operating in Nigeria during the period.

However, the NUPRC data showed that aside from crude oil which experienced a decline, condensate, which is usually outside OPEC’s quota calculation, also fell in March.

Overall, when condensate production was added to oil output for the month, Nigeria steadily declined from 1.64 million bpd in January to 1.53 million bpd in February and further to 1.43 million bpd in March.

Apart from the reasons mentioned by the minister as being responsible for the two-month repeated decrease in production, oil theft and waning investments remain Nigeria’s biggest constraints to achieving its OPEC quota.

Last year, OPEC reviewed Nigeria’s production quota from over 1.7 million bpd to 1.5 million bpd for 2024, citing the country’s inability to consistently meet its allocated production targets.

Meanwhile, crude oil prices at the weekend jumped to the highest price since October as Israel braced for a possible attack from Iran, a development that would threaten major disruptions in a region that accounts for a third of the world’s crude output.

Nigeria’s lesser-than-expected production, it also means that it may miss this second wave of unusually high oil prices due to its inability to raise output considerably.

But an assault is expected to come as soon as this week from Iran’s axis, which would mark a significant widening of the conflict that started when Hamas attacked Israel in October.

Global benchmark Brent surged as much as 2.7 percent to top $92 a barrel, a level last reached during the early days of the war. US benchmark West Texas Intermediate climbed as much as 3.1 percent to surpass $87, Bloomberg reported.

Israel is expecting a drone or missile attack on government targets within days, either directly or from Iran’s proxies, people familiar with Western intelligence assessments said.

The move still hasn’t been approved by Tehran’s highest-ranking officials, the people said, while the US has moved additional military assets into the region.

Oil has surged about 19 percent this year as the Middle East conflict bolsters a market shaped by supply restrictions and stronger-than-expected demand.

The escalating geopolitical tensions – also including attacks on Russian energy infrastructure by Ukraine – have spurred bullish activity in the oil options market.

Continue Reading


TCN restores national grid after fire incident at Afam power station



The Transmission Company of Nigeria (TCN) says the national grid has been fully restored after Monday’s fire incident at the Afam power generating station in Rivers.

TCN’s General Manager, Public Affairs, Mrs Ndidi Mbah, stated in Abuja that the fire caused a partial disturbance of the grid.

“At about 2:41a.m., fire erupted at the Afam V 330kv bus bar coupler leading to the tripping of two units, Afam III and Afam VI.

“This resulted in a sudden generation loss of 25mw and 305mw respectively at the two units; destabilising the grid and causing a partial collapse.

“The affected section of the grid has been fully restored and stabilised,” she stated.

She explained that during the incident, the Ibom Power plant was isolated from the national grid and it supplied power to parts of Port Harcourt region, thereby minimising the effect of the system disturbance.

“TCN reaffirms its commitment to enhance the resilience and reliability of the national grid and pledges to continue investing in measures to strengthen the grid infrastructure,” Mbah assured.

Continue Reading


Power supply: Don’t blame us for failure to satisfy customers — TCN fires back at IBEDC



The Transmission Company of Nigeria (TCN) has debunked claims by the Ibadan Electricity Distribution Company (IBEDC) that it was responsible for its inability to provide the estimated supply hours to customer feeders.

General Manager, Public Affairs, TCN, Ndidi Mbah, said this in a rejoinder titled, ‘IBEDC’s Publication On Estimated Hours Of Power Supply.’

It noted that the publication by IBEDC on 9 April, which stated that TCN was responsible for failing to deliver estimated supply hours to its feeders due to system outages and tripping on TCN ‘s feeders, was incorrect.

The TCN stressed that the causes of the outages on IBEDC’s 11kV and 33kV lines were due to DisCo’s issues, unrelated to TCN’s frequency control operations.

It stated that the statement issued by IBEDC was scrutinised by TCN’s regional managers in Osogbo alongside IBEDC officials and was found to be inaccurate, thus requiring corrections.

“While TCN sees this misinformation of IBEDC as a ploy to undermine and mislead the public against regular power supply, we remain focused on supporting the government’s move towards a more robust and efficient power supply.

“Consequently, TCN assures the public of its commitment to continue to work hard to effectively transport the entire bulk electricity received from the generating companies to distribution load centres nationwide,” the statement added.

Recall that on Tuesday, 9 April, Ibadan DisCo blamed TCN for not supplying power to customers on feeders. It stressed that the inability to provide the expected service hours was due to outages in the TCN system and tripping incidents on the IBEDC feeders.

Continue Reading