Nigeria’s oil production continues slump amid onshore shutdown

By Faruk Shuaibu (Abuja) Jide Olasunkanmi (Lagos)  and Agency Report

Nigeria’s oil output continued to fall in September as some onshore production ground almost to a halt, according to government data.

Nigeria produced a daily average of 1.14 million barrels of crude oil and condensate –- a light hydrocarbon – last month, about 42,000 barrels fewer than in August, figures published by the Nigerian Upstream Petroleum Regulatory Commission show.

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Output has declined steadily since the first quarter of 2020, when Nigeria produced roughly double the amount, according to the data.

The government blames rampant theft on the pipelines that crisscross the Niger Delta for shutting down wells and killing off investment.

Production of three major export grades – Bonny, Brass and Forcados – has shrinked in recent months, with none of them accounting for more than 8,000 barrels per day in September.

Nigeria aims to add 500,000 barrels a day to its production by the end of November, mainly by resuming operations at Shell Plc’s Trans-Niger pipeline and Forcados terminal, Mele Kyari, chief executive of the state-owned energy company, said this week.

However, the Organisation of Petroleum Exporting Countries (OPEC) has raised its crude oil production by 146,000 barrels per day (bpd) in September compared to August production.

However, the 10 OPEC members in the OPEC+ pact still had their total output well below the target level under the agreement. 

OPEC’s oil production rose to 29.767 million bpd last month, according to secondary sources in the cartel’s closely watched Monthly Oil Market Report (MOMR) published on Wednesday.

The report indicates that the rise in oil production was the highest OPEC production level since April 2020, when OPEC’s de facto leader Saudi Arabia and non-OPEC Russia briefly broke the OPEC+ pact and engaged in a price war as demand was crashing with the start of the lockdowns during the pandemic.

In September 2022, crude oil output increased mainly in Saudi Arabia, Nigeria, Libya, and the UAE, while production in Iraq, Venezuela, and Iran declined, OPEC said in its report.

“Libya has recovered most of the oil production lost to port blockades in the previous months, but the North African producer is exempted from the OPEC+ cuts and targets due to the frequent instability at oil terminals 

Despite the fact that Nigeria boosted its oil production by 31,000 bpd in September, it is massively lagging behind its quota, and its oil production is at the lowest level in at least three decades”, the report stated.