Nigeria is facing great challenges salvaging the oil sector following deep cut by oil thieves. The drop in crude oil production from 1.32 million barrels per day in February to 1.23mbpd in March, indicates that output plunged by 91,000bpd. This translates to a loss of N720 billion according to records.
For decades, Nigeria has been plagued by oil theft and pipeline vandalism and to recover the losses, the Federal Government has been tasked to recalibrate the security architecture in the Niger Delta to curb the menace.
However, this is coming as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Monday, said the nation’s oil and gas reserves has risen to 37.50 billion barrels as at January 2024, as against 37.046 billion it announced in May 2022.
The Commission’s Chief Executive, Engr Gbenga Komolafe, announced the creation of strong policies aimed at improving and optimising oil and gas operations in the country.
According to him, the gas and non-associated gas reserves is 102. 59 trillion cubic feet (TCF) and 106.67 TCF respectively, resulting in total gas reserves at 209.26 TCF.
According to him issues related to crude supply regulation and enforcement are vital in prioritising the supply of feedstock to local refineries and addressing complaints from oil producers and Dangote Refinery within the stipulated period.
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The development comes after reports on how the country’s crude oil production dropped in February and March 2024.
Data obtained released by the April 2024 Monthly Oil Market Report of the Organisation of Petroleum Exporting Countries (OPEC) showed that Nigeria’s crude oil production (excluding condensates) witnessed the second consecutive monthly decline since the beginning of this year, as it dropped to 1.231 million barrels per day in March, from 1.322 million barrels per day of crude in February this year.
However, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, attributed the shortfall in expected production to problems with the Trans Niger Pipeline and maintenance carried out by some oil companies. Oil thieves and vandals have consistently sabotaged oil production in the Niger Delta, contributing to the country’s abysmal output.
The deficit is a far cry from the 2024 OPEC quota of 1.5mbpd and the federal budget benchmark of 1.78mbpd (including condensates). According to the Nigerian Upstream Petroleum Regulatory Commission, the total volumes of crude oil and condensates produced in January, February, and March were 1.643mbpd, 1.539mbpd, and 1.438mbpd respectively.
The limited production has disrupted budgetary expectations as crude oil and gas constitute 70 per cent of Nigeria’s budget revenues and 95 per cent of its foreign exchange earnings.
