May 30, 2024

Nigeria’s oil production set to return to previous 1.7 million a day- FG

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Nigeria has resolved issues that have been responsible for a hitch in its oil production and would return to full scale output soon.

It would be recalled that Nigeria was producing some 1.7 million barrels a day before the lull in production, but the Minster of State for Petroleum Resource (Oil), Heineken Lokpobiri, has assured that all issues that caused the sharp drop have been resolved.

Lokpobiri, has put the shortfall blame in crude oil production which was reported in the first quarter 2024 (Q1 2024) on challenges with the Trans Niger Pipeline and the maintenance carried out by some oil companies.

The Minister also announced that the issues have been adequately addressed, adding that production is expected to return to its previous levels in the coming days.

The Minister’s Special Assistant, Media and Communications, Nneamaka Okafor, quoted Lokpobiri as saying the government is intensifying efforts to restore the production to previous level of 1.7million barrels per day and also exceed it.

Okafor: “In response to recent concerns regarding a shortfall in oil production in Nigeria during the first quarter of 2024, the Minster of State for Petroleum Resource (Oil), Sen. Heineken Lokpobiri, assures that measures are being taken to address the situation to, not only restore production to previous levels, but to also increase it.

He said that Nigeria’s oil production, including condensate, which was approximately 1.7 million barrels per day (bpd) prior to these developments, will soon be restored.

He said the Ministry of Petroleum Resources is actively engaged in policy evolution aimed at maximizing the utilization of all available wells in Nigeria.

“This strategic approach will enable the country to ramp up production, thereby generating vital revenue to stabilize the nation’s foreign exchange reserves.

The increased revenue will also empower the government to fulfill its commitments in providing essential infrastructure, as outlined in the 2024 budget,” he stated.

Following this situation, Libya, emerged as the highest crude oil producer in Africa when Nigeria’s output dropped by 6.8 per cent to 1.23 million barrels per day in March 2024, from 1.32 bpd in February 2024.

On the other hand, Libya’s oil output rose by 5.4 per cent to 1.236 million bpd in March 2024, from 1.173 million bpd in February 2024, according to the Organisation of Petroleum Exporting Countries, OPEC.

The Organization, a permanent intergovernmental organisation of 12 oil-exporting developing nations that coordinates and unifies the petroleum policies of its Member Countries, disclosed this in its April 2024 Monthly Oil Market Report, MOMR, said the output was based on data from official sources in Nigeria.

Based on secondary sources, OPEC stated that Nigeria retained its leadership position on the continent as it produced 1.398 million bpd while Libya produced 1.161 million bpd during the period.

However, OPEC stated: “According to secondary sources, total OPEC-12 crude oil production averaged 26.60 mb/d in March 2024.

“According to secondary sources, total OPEC-12 crude oil production averaged 26.60 mb/d in March 2024, 3 tb/d higher, m-o-m. Crude oil output increased mainly in IR Iran, Saudi Arabia, Gabon, and Kuwait, while production in Nigeria, Iraq, and Venezuela decreased.”

In another development, the Federal Government has expressed concerns over the capacity of the industry to meet its domestic crude obligations to local refineries, insisting that supply to local refineries remain a priority.

Speaking at a meeting to review Domestic Crude Oil Supply Obligation as contained under Section 109(2) of the Petroleum Industry Act, PIA 2021, the Chief Executive, Nigerian Upstream Petroleum Regulatory Commission, Engr. Gbenga Komolafe, insisted that priority must be given to crude supply to local refineries.

Komolafe pointed out that the overall objective of the government was to ensure that Nigeria became a net exporter of refined petroleum products.

“Producers should satisfy their domestic crude oil supply to the domestic refineries so that, as a nation, we seize the opportunity to reverse the ugly trend by ensuring that we develop our midstream and end up being a net exporter of petroleum products, especially now that we are trying to exit the subsidy regime. The only way to sustain that is to become robust in our domestic refining capacity.

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