By Charles Kennedy
Nigeria produced 1.517 million barrels of oil per day last month, down by 2% from February, Nigerian media reported, noting that the February average had represented a monthly increase of 3.5%.
The figures come from the Nigerian Upstream Petroleum Regulatory Commission and counter expectations of a continued increase in output. This means that the country might miss the output level needed for the budget, which stands at 1.69 million bpd for full 2023.
The commission did not provide a reason for the production decline but Nigerian media noted that there had been reports of a pipeline explosion in early March. The blast at a Shell-operated pipeline killed at least 12 people, the supposed cause being either oil theft or pipeline sabotage—both widespread in the Niger Delta.
This was the first production decline in Nigeria’s oil industry in the last six months. However, even with the recent production increases, Nigeria remained short of its OPEC production target, which stands at 1.8 million bpd.
Nigeria has been lagging behind with its production quota but that was only a problem when OPEC+ was boosting production. Now, the cartel is cutting again, with Saudi Arabia alone pledging half a million barrels daily in output reduction.
Understandably, Nigeria is not among the OPEC+ members that have made commitments for additional cuts. These include Saudi Arabia, the United Arab Emirates, Kuwait, Iraq, Algeria, Oman, Gabon, and OPEC+ member Kazakhstan.
Nigeria, meanwhile, has stepped up efforts to boost its long-term production prospects. State-owned energy major NNPC began exploration works in onshore frontier basins last month, aiming to expand the country’s proven oil reserves from 37 billion barrels to 50 billion barrels.
The boost in proven reserves should serve to enhance Nigeria’s energy security and improve economic benefits for the nation, according to NNPC’s chief executive, mele Kyari. NB: Charles Kennedy wrote this article for Oilprice.com
