News Desk
Latest data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has shown that Nigeria’s daily production of crude oil fell by 12.8 per cent to 1.29 million barrels per day in July from 1.48 million barrels per day the previous month.
The figure includes condensates of almost 0.2 million barrels per day. Excluding condensates, the nation’s total crude oil output was around 1.08 million barrels per day compared with nearly 1.3 million barrels per day in June 2023.
This decrease is the sharpest since April 2023, when total crude oil and condensate production dropped to 1.25 million barrels per day.
The fall in crude oil output in the review month was mostly due to a significant reduction in crude oil evacuation through the Forcados oil terminal following pipeline repairs after the discovery of oil leaks.
The NUPRC data showed that crude oil output (excluding condensates) through the terminal fell to approximately 0.09 million barrels per day compared with 0.24 million barrels per day in the prior month.
Additional contributing factors to the decline include minor output reductions of 18 thousand barrels per day, 9 thousand barrels per day, and 7 thousand barrels per day at the Bonny, Escravos, and Qua Iboe terminals, respectively.
Nigeria has consistently failed to produce to its quota in the agreement by the Organisation of the Petroleum Exporting Countries and its allies, OPEC+, which gave it a target of 1.8 million barrels per day.
Nigeria’s OPEC+ quota excludes condensates, but these multiple problems make Nigeria the biggest laggard in crude oil production in the 23-nation alliance.
On a positive note, crude oil evacuations from Forcados are expected to ramp up to optimal levels of 0.23 million barrels per day following the recent completion of repairs by Shell Petroleum Development Company.
Ongoing challenges with crude oil theft and illegal connections to key trunk pipelines have prevented the country’s oil output from reaching potential levels of around 1.7 to 1.8 million barrels per day.
Although the oil sector contributes about 6.2 per cent to Nigeria’s GDP as of the first quarter, its importance to the economy is underscored by the fact that it accounts for more than 80 per cent of foreign earnings.
NUPRC plans to hold an international roadshow in the coming weeks to attract investments in its upstream sector.
Reacting on the development, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has called on the federal government to take advantage of indigenous technology in addressing Nigeria’s petroleum refining challenges.
Mr Chinedu Anyaso, the Chairman of IPMAN, Enugu Depot Community in charge of Anambra, Ebonyi and Enugu States, said in the Anambra capital, Awka, on Tuesday while reacting to the inauguration of the new ministers in President Bola Tinubu’s cabinet.
Mr Anyaso commended the president for successfully constituting his cabinet and expressed optimism that the ministers would bring greater value and direction to his administration.
He specially congratulated Mr Heineken Lokpobiri, the Minister of State for Petroleum, on his appointment, urging him to bring his experience in the petroleum industry and knowledge of the Niger Delta environment to bear in the downstream sector.
The IPMAN official said only local production of petroleum products would bring lasting solutions to the country’s energy challenges.
The federal government frowns upon local refining, and despite this, there is a proliferation of these illegal establishments in the Niger Delta.
He said the government should profile operators of illegal refineries and open conversations with them with the aim of tapping into their technology and mainstreaming their operations.
According to him, the current state of affairs in the downstream sector is unsustainable, and the lack of refining capacity is making it worse.
“I expect that part of the federal government’s immediate plan is to get our local refineries working through the fixing of the four existing refineries and encouraging the establishment of modular refineries.
“The new Minister of State for Petroleum, who is from the Niger Delta, should encourage the government to bring operators of the illegal refineries in the creeks to the national grid.
“Instead of chasing them and destroying their infrastructure, the government should call them to be part of the solution, at least in the short term, while we wait for the main refineries to resume operations. This will reduce the pressure on foreign exchange,” he said.
Mr Anyaso said the Federal Government should consider the call of IPMAN to use their network for Compressed Natural Gas (CNG) for quicker implementation of the energy switch.
He said there should be immediate and massive conversion plants across the 36 states of the country to enable users of automobiles and generators to convert them to gas-powered engines.
