February 25, 2024

Nigeria’s crude oil production in upward swing, hits 1.258mb/d in January 2023, 13 oil rig count, highest since April 2020

Oredola Adeola

Nigeria has maintained its lead as Africa’s ‘biggest’ oil producer, with an upward crude oil production swing of 1.258 million barrels per day(bpd) in January 2023, the highest since March 2022. The country also achieved a rig count of 13 for the month under review, being the highest since April 2020.

This was revealed in the Organisation of Petroleum Exporting Countries, OPEC’s latest Monthly Oil Market (MOMR) Report for February 2023, obtained on Tuesday by EnergyDay.

The country’s rig count was 13 for the month of January 2023, up from 12 achieved in December 2022, and up from 6 achieved in January 2022 and the highest since April 2020 when the country achieved 16 rig counts. This is a change of 8.33% from last month and 116.7% from one year ago.

EnergyDay gathered that the highest rig count ever attained by Nigeria was 23 functional rigs achieved in February 2020.

Nigeria has therefore remained the continent’s top producer for the third consecutive month, after it recovered from an output decline recorded between June, and September 2022, due to massive crude oil theft and pipeline vandalism.

The production volume for January 2023, was the country’s highest oil production since January 2022 when output volume averaged 1.39 million bpd.

The MOMR showed that Nigeria maintained its lead within the continent with 246,000 barrels higher than Algeria’s 1.012 million barrels, and Angola the third on the log, had 1.105 million bpd output volume for the month of January 2023 based on direct sources.

Nigeria’s oil production, based on direct sources, showed an increase of 28,000 barrels when compared with the 1.235mbpd output volume recorded in December 2022.

OPEC’s report for the month under review revealed that Nigeria’s oil production increased to 1.336 mbpd for January 2023, compared with 1.271mbpd output level achieved in December 2022, based on secondary sources.

 

FACTORS RESPONSIBLE FOR PRODUCTION GAINS

The consistent increase in Nigeria’s production level in the last four months, according to the Government was credited to the level of gains achieved with the intense fight against crude theft and organized criminality allegedly involving top government officials/individuals and security agencies.

Chief Timipre Sylva, Minister of State for Petroleum Resources, had in a recent statement promised that Nigeria was committed to achieving its OPEC crude oil production quota of 1.8 million bpd by the end of May 2023.

According to him, the country’s security architecture involving the communities, security personnel, oil companies and the government introduced recently to combat pipeline vandalism and crude oil theft, has shown some early signs of improvement.

He said, “Our production for example has improved from where we were in the past. We are producing over a million barrels now and we believe that when we have built confidence enough on the pipelines and all the producers begin to inject into the pipelines that have been secured, we will be able to produce quickly to meet our OPEC quota.”

Mallam Mele Kyari, Nigerian National Petroleum Company Limited (NNPCL) Group Chief Executive GCEO) also said that Nigeria will achieve an average production volume of 2.2 mbpd in 2023.

The GCEO said, “Definitely, we can hit our target of 2.2 million barrels per day, but our budget target is 1.8 million bpd. There are construction works that we are doing on our pipelines that will aid our oil production.

EnergyDay’s check showed the return of Forcados and partial restoration of the Trans Niger Pipeline (TNP). Collaboration with the oil-producing communities played a significant role in the output gains.

 

OPEC RAISES 2023 WORLD OIL DEMAND FORECAST

 

OPEC on its part, raised its world oil demand growth forecast for 2023 by 100,000 bpd, to 2.3 million bpd, calling for 400,000 bpd in growth from Organization for Economic Cooperation and Development (OECD) countries and 2 million bpd from non-OECD countries.

According to OPEC, the “key” to oil demand growth this year will be the return of China from its Covid-19 economic slumber. OPEC also delicately mentioned “geopolitical tensions” as a 2023 “global economic concern” that could impact the demand for crude oil and crude oil products.

According to the report, Crude oil output among the 13 member countries increased mainly in Nigeria, Angola and Kuwait, while production in Saudi Arabia, Iraq and IR Iran declined. OPEC added that its member’s crude oil production averaged 28.88 mb/d in January 2023, lower by 49 tb/d m-o-m.

Preliminary data indicates that global liquids production in January increased by 0.6 mb/d to average 101.7 mb/d compared with the previous month.

The share of OPEC crude oil in total global production decreased by 0.2 pp to at 28.4% in January, compared with the previous month. Estimates are based on preliminary data for non-OPEC supply, OPEC NGLs, and non-conventional oil, while assessments for OPEC crude production are based on secondary sources.

Non-OPEC liquids production (including OPEC NGLs) is estimated to have increased m-o-m in January 2023 by 0.7 mb/d to average 72.8 mb/d. This was higher by 2.5 mb/d y-o-y. Preliminary estimated production increases in January were mainly driven by OECD Americas, OECD Europe and Latin America, which partially offset declines in Russia.