Crude oil production in Nigeria dropped by 12.56% in July to 1.29 million barrels daily from 1.48 million barrels daily in June, Business Day has reported, citing data from the Nigerian Upstream Petroleum Regulatory Commission.
According to the state agency, one of the reasons for the decline was the temporary shutdown of the Forcados terminal, which Shell, the operator, announced in mid-July on suspicions of a leak.
Normally, Forcados sees loadings of an average of 220,000 barrels daily but on July 12 workers in the area saw fumes near a vessel that was being loaded with crude. The repairs work on the terminal was expected to be completed by the end of the first week of August but as of the middle of this week, Forcados remained shut down.
Earlier this year, the Upstream Petroleum Regulatory Commission warned that Nigeria is producing 1 million bpd of crude less than it has the capacity to produce. The agency cited a lack of investments, a shortage of funding sources because of the energy transition, and insecurity among the factors driving the situation.
"Currently, Nigeria has the technical allowable capacity to produce about 2.5 million barrels of oil per day. However, arising from the highlighted challenges, our current production hovers around 1.5 million barrels of oil and condensate per day," the chief executive of the body said in May.
To remedy matters, Nigeria earlier this month announced the pending launch of a roadshow to pitch upstream investments in the country.
"Whereas the global imperatives for energy transition is clear and justified, the need for Africa's energy security, economic development and prosperity cannot be overemphasised," the Nigerian regulator, which is organizing the roadshow, said.
According to a senior Petroleum Ministry official, Nigeria is looking to boost its oil production to 1.7 million barrels daily by November this year.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com More