News in brief: Nigeria’s daily crude oil and condensate output is now one million barrels lower than its 2.5 million barrels per day technical limit, due to challenges including insecurity, low investment, and de-prioritisation caused by energy transition.
Nigeria has announced that its daily crude oil and condensate output is now one million barrels lesser than its 2.5 million barrels per day (bpd) technical limit. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) made the announcement at a sensitisation workshop themed ‘The Implementation of The Host Communities Development Trust’.
The NUPRC’s Executive Commissioner, Economic Regulation & Strategic Planning, Kelechi Ofoegbu, said that several challenges have negated the efforts going into increasing oil and gas production. He named such things as insecurity, low investment, and energy transition.
Insecurity is a recurring issue in Nigeria and the country ranks 10th on the Global Security Index chart of 2022. Meanwhile, its oil and gas sector has continually seen lesser investments, including from foreign investors.
Also, as Ofoegbu’s statement showed, energy transition in several countries mean that hydrocarbon development is no longer a priority for many. It is interesting that the commission’s executive omitted the issue of thieves.
Earlier in January 2023, Mele Kyari, group chief executive officer (GCEO) of the Nigerian National Petroleum Company (NNPC), said that the issue of security is a major pain point for the sector.
As of September 2022, a Reuters article also mentioned pipeline vandals and thieves as major issues plaguing Nigeria’s oil output volume. At the time, the daily output of oil and condensates (mixture of light liquid hydrocarbons) was at about 1.18 million. The commission claimed to have applied efforts to stop vandalism, which likely accounted for the rising output from September 2022 to February 2023, before this latest decline.
Now, the commission says that it is at 1.517 million bpd in March 2023, while it was at 1.547 million bpd the previous month. Meanwhile, oil production dropped to 1,268,202 bpd from February’s 1,306,304 bpd. In a local report, there were 12 deaths in Rumuekpe community, Emuoha local government area of Rivers state after an attempt to tap oil led to an explosion in March.
In related news, as oil production dwindles, the country’s apex bank continues to strengthen efforts to increase earnings from the non-oil sector. As many economic experts have argued, the country is ripe for diversifying its revenue away from crude oil.
