The BRICS bloc is expanding…
Projecting the oil price outlook…
Oil production in Nigeria slumped by 15.5% in July from June, marking the third month-on-month decline since April, according to data from the local upstream regulator.
Last month’s oil production in the African OPEC member fell to 1,081,396 barrels per day (bpd) from 1,248,960 bpd produced in June, per the crude oil and condensate production data of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reported by local media.
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. 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.
“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,” Gbenga Komolafe, chief executive at the NUPRC, said in May.
Nigeria aims to significantly increase its oil production to up to 1.7 million bpd by November 2023, hoping to win a higher quota in the OPEC+ agreement, Gabriel Tanimu Aduda, Permanent Secretary at Nigeria’s Ministry of Petroleum Resources, told Energy Intelligence last month.
Nigeria’s quota was 1.742 million bpd earlier this year, but due to its underproduction of more than 400,000 bpd, the output cap for Nigeria was lowered to 1.38 million bpd at the OPEC+ meeting in early June.
Nigeria’s NUPRC plans to hold an international roadshow in the coming weeks to attract investments in its upstream sector.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com