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Oil Markets In Limbo Ahead Of OPEC Meeting

Oil Markets In Limbo Ahead Of OPEC Meeting

Oil investors are taking a…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

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Nigeria State Firm Aims To Rival Oil Majors In Domestic Production

Crude oil

State-held Nigerian National Petroleum Corporation (NNPC) aims to make its exploration and production unit—the Nigerian Petroleum Development Company (NPDC)—the top oil producer in the country, local media quoted NNPC group managing director Maikanti Baru as saying.

NNPC aims to make NPDC the top E&P company operating in Nigeria and rivaling in terms of production Shell and the other international oil majors. Currently, NPDC produces 230,000 bpd, while the goal is to take that daily production level up to 500,000 bpd soon, according to NNPC.

As of September last year, NPDC was the fifth largest oil producing company in Nigeria. Back then, the company was pumping 180,000 bpd, and plans were to raise oil production to 300,000 bpd by 2018, then to 400,000 bpd by 2019, and up to 500,000 bpd by 2020.

According to industry data quoted by Nigerian outlets in September 2017, Shell Petroleum Development Company (SPDC) is the largest producer operating in Nigeria, with more than 900,000 bpd of production. SPDC also has more than 6,000 kilometers (3,728 miles) of pipelines and flowlines, 87 flowstations, 8 gas plants, and more than 1,000 producing wells.

The other oil majors that produce significant amounts of oil in Nigeria are the joint ventures and local subsidiaries of Exxon and Chevron, as well as Nigerian Agip Oil Company (NAOC), a joint venture with Eni.

Related: Oil Markets React Stoically To Rising Rig Count

Throughout 2017, in the absence of significant militant attacks, Nigeria managed to gradually increase its crude oil production to the point of becoming a headache for OPEC’s cuts because it had been exempt from the initial collective agreement to curtail production. At the November 2017 meeting, however, both Nigeria and fellow African producer Libya agreed to cap their production for 2018 at 2017 levels so as not to spoil OPEC’s efforts.

Analysts have questioned the capacity and ability of Nigeria and Libya to further increase their respective production due to security, financing, and technical challenges.

In each of the three full months this year, Nigeria managed to increase its production month over month, according to OPEC’s secondary sources. Nigeria’s oil production in March 2018 increased by 18,200 bpd over February to average 1.81 million bpd.

By Tsvetana Paraskova for Oilprice.com

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