Nigeria recorded its first crude oil production decline in six months in March this year, first time since output nearly fell to 900,000 barrels per day in September last year, a THISDAY review of new data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has shown.
The country’s production declined to 1.26 million bpd during the month, indicating a 2.9 per cent decrease from the over 1.3 million bpd recorded in February.
The figure released by the nation’s upstream regulatory agency differed markedly from an earlier Reuters survey which stressed that Nigeria was nearing its 1.6 million barrels per day target in the first quarter of 2023.
While the Organisation of Petroleum Exporting Countries (OPEC) production allocation to Nigeria remains at about 1.8 million bpd, the country’s output in February was roughly 1.3 million bpd, still short of the cartel’s expectation.
But when condensates which are outside OPEC’s monthly calculations are included, Nigeria’s production during the month was 1.517 million bpd, down from 1.547 million bpd the previous month.
However, output declined to 1.26 million bpd in March and was 1.25 million bpd in January, according to the information released by the industry regulator.
Nigeria has been unable to meet its OPEC production in the last two years, blaming crude oil theft in the Niger Delta for the development. It has however in the last few months moved to stop the leakages with the deployment of federal as well as local security to curb the crime.
OPEC and its allies, known as OPEC+, agreed to cut production in late 2022 to support the market as the economic outlook worsened and prices weakened. Some members of the cartel, excluding Nigeria had also last week voluntarily decided to cut production to raise falling prices.
A Reuters survey had earlier in the month reported that Nigerian production posted OPEC’s biggest increase in March bringing the country closer to a target to lift output to 1.6 million bpd this quarter.
It’s unclear what caused the decline in Nigeria’s overall oil production, but in the early morning of March 3, a pipeline explosion was recorded in a community in Rivers State with at least 12 persons believed to have died from the incident.
According to reports, the pipeline fire specifically happened in the Rumuekpe community in the Emuoha Local Government Area of Rivers State after a crude oil pipeline in the community was tampered with by vandals.
Hope had risen for Nigeria after OPEC and its allies known as OPEC+ unexpectedly announced additional cuts to oil production of over 1.16 million bpd, raising oil prices from $74 per barrel to $85 per barrel.
With production benchmark of 1.69 million bpd in the 2023 budget and $75 price tag, Nigeria has been struggling to meet its OPEC output quota, thereby hobbling Nigeria’s ability to execute a budget surplus in 2023.
Last week, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mr Mele Kyari, said that the company had spent huge sums to ensure that oil theft was reduced in the Niger Delta.
President Muhammadu Buhari had also given the security personnel operating in the region till May to eliminate the menace of oil theft and vandalism.
Emmanuel Addeh in Abuja
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