Nigerian oil production, beleaguered by rampant theft and sabotage, hit its highest in more than three years amid a concerted effort to crack down on targeted attacks and organized theft rings.
According to OPEC data, the country's production hit 1.476 million barrels per day (bpd) in February, after hitting a decades-low in the second half of 2022, when it dropped below 1 million bpd. Since then, the government has pursued a more efficient and aggressive policy for cracking down on theft and pipeline sabotage, hiring private security firms to bolster military efforts to guard facilities. As of this week, Nigeria is pumping more than it has since December 2020. Nigeria has consistently failed to produce to its quota in the OPEC+ agreement.
The combination of pipeline vandalism and oil theft with a lack of investment in capacity has made Nigeria the biggest laggard in crude oil production in the OPEC+ alliance. Oil theft and pipeline vandalism have long plagued Nigeria's upstream oil and gas industry, driving majors out of the country and often resulting in force majeure at the key crude oil export terminals. Nigeria's oil production is around 1 million bpd below its capacity.
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The government has cited a lack of investments, a shortage of funding sources because of the energy transition, and insecurity among the factors driving the situation. Unhindered by theft and sabotage, Nigeria has the technical allowable capacity to produce about 2.5 million barrels of oil per day," according to Nigerian oil executives. Nigeria's state-run NNPC energy company said earlier this week that it had destroyed more than 6,000 illegal refineries processing stolen crude, Reuters reported.
State energy company NNPC Limited had so far destroyed over 6,000 illegal refineries used to process stolen crude.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com More