Nigeria’s crude oil production for March 2023 edged up to about 1.6 million barrels per day (mbpd), with the country recording the biggest Organisation of Petroleum Exporting Countries’ (OPEC) biggest increase last month, a survey by Reuters has revealed.
At about 1.6 million, the country was able to meet the federal government’s target for the first quarter of 2023, the survey conducted by Reuters for March disclosed. The latest production performance contributed significantly to the 28.90 mbpd pumped by OPEC.
Minister of Finance, Budget, and National Planning, Mrs. Zainab Ahmed had in December 2022, said at the World Bank’s Nigeria Development Update and Country Economic Memorandum in Abuja, that the government set its sight on Nigeria’s crude oil production reaching 1.6mbpd by the first quarter of 2023.
Ahmed hinged the government’s expectation on efforts made by stakeholders to improve oil production infrastructure and reduce oil theft.
Nigeria’s oil output as published by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) was 1.25mbpd in January and 1.3mbpd in February, but the volume produced for March came close to 1.6mbp.
The Nigerian National Petroleum Company Limited (NNPC) had on several occasions disclosed that Nigeria’s oil production had climbed to 1.6mbpd, with the first of such disclosures coming early December 2022 from the Chief Investment Officer of the NNPC Upstream Investment Management Services (NUIMS), Mr. Bala Wunti, at an industry event in Uyo, Akwa Ibom State.
Also in February, at a meeting of stakeholders in the oil and gas industry in Abuja, the Group Chief Executive Officer of NNPC, Mallam Mele Kyari, had confirmed that the country’s oil production had risen to 1.67 million barrels per day, some millions short of the 1.8 million bpd quota allocated to Nigeria by OPEC.
Kyari had said the ‘rectangular’ security approach employed by the company was already working, adding that implementation of the ‘Detect, Deter, Destroy’ and Recover (3D strategy) has been a game changer in the fight against crude oil theft and vandalism.
The Reuters survey tracked supply to the market based on shipping data provided by external sources, Refinitiv Eikon flows data, information from companies that track flows such as Petro-Logistics and Kpler, and information provided by sources at oil companies, OPEC, and consultants.
The survey established that the increased output level by Nigeria, Africa’s largest oil and gas producer was recorded, despite a 70,000 bpd drop in the OPEC oil output in March, which was attributed to oilfield maintenance in Angola and a halt in some of Iraq’s exports.
Further revelation showed that OPEC’s output was down more than 700,000 bpd from September, and 70,000 bpd from February 2023 output level.
The largest drop of 100,000 bpd was in Angola and was due to a small export programme and field maintenance on the Dalia stream, resulting to exports hitting a multi-month low on some estimates.
The second-biggest drop came from Iraq, where companies have reduced output in the northern Kurdistan region following a halt to the export pipeline penultimate weekend.
Higher exports from southern Iraq limited the decline, the survey found, adding that OPEC’s output was significantly undershooting the targeted amount by 930,000 bpd because many producers – notably Nigeria and Angola – lack the capacity to pump at the agreed levels.
OPEC’s Gulf producers, Saudi Arabia, Kuwait and the United Arab Emirates maintained high compliance with their targets under the OPEC+ agreement, the survey revealed.
Meanwhile, a petroleum expert and Publisher of Oil+Gas Report, Mr. Toyin Akinosho has advised the incoming administration to as a matter of priority emplace an independent and powerful regulator for the Nigerian oil and gas industry, especially the upstream subsector in order to ensure compliance to operational rules as well as to increase foreign exchange earnings to the country.
Akinosho added that such regulator whether it is the NUPRC or the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) should be made to possess the same kind of powers and independence like the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) to be able to regulate the oil sector well without undue interference by external forces.
In an exclusive chat with THISDAY, Akinosho explained that robust regulation was needed in the oil and gas industry to ensure that operating companies operate in accordance with the rules.
He said such regulator must be able to take decisions without undue influence from the minister as obtained in the CBN and the NCC in their running of the banking and telecoms sectors, respectively.
“For me, it’s just that one word that we say every time -regulation, we need an independent regulator who does not look behind his back. Just regulate all these companies properly, let people operate how they should, let there be openness. In everything that they do, let it be fair.
“Once you get a regulator that works, every other thing will follow accordingly. The thing is, if the regulator is weak, which the defunct Department of Petroleum Resources (DPR) was, because the DPR was some kind of an agent of the minister and when a certain DPR regulator had the powers to do a bid round, you saw what he did,” Akinosho said.
He maintained that regulator was very key, pointing out that all the evacuation issues Nigeria had that led to rampant crude oil theft was a function of regulation and the kind of regulator in place.