NIGERIA’S oil production fell again in October, nearly handing Libya the title of Africa’s top oil producer.
This is according to the Organization of the Petroleum Exporting Countries’ most recent monthly oil market report.
OPEC uses secondary sources to track its oil output, but it also publishes a table of numbers given by its member states.
What the report is saying
OPEC said oil output climbed mainly in Saudi Arabia, Venezuela, the UAE, and Kuwait while Nigeria, Gabon and Equatorial Guinea suffered a decline in their monthly oil production.
The report said, “According to secondary sources, total OPEC-13 crude oil production averaged 27.45 mb/d in October 2021, higher by 0.22 mb/d m-o-m. Crude oil output increased mainly in Saudi Arabia, Venezuela, the UAE, and Kuwait, while production in Nigeria, Gabon and Equatorial Guinea declined.”
According to data provided to OPEC by Nigeria, output fell drastically to 1.228 million barrels per day (bpd) in October 2021, down from roughly 1.247 million bpd in September.
Libya, which surpassed Angola as Africa’s second-largest oil producer in December 2020, increased production to 1.244 million barrels per day in October from 1.161 million barrels per day in September.
According to OPEC, Nigeria oil production fell to 1.354 million bpd in October 2021 from 1.399 million bpd in October 2021, based on secondary sources.
Based on direct contact, Nigeria had the second-largest decline in output among its OPEC counterparts in October, after Iraq. According to secondary sources, the country’s production dropped the highest in the month.
Why the drop in Nigeria’s crud oil output
Nigeria has experienced a drop in crude oil production over the last three months, failing to meet the 1.6mbpd cap placed on it by OPEC.
Analysts suggest this is due to rig shutdowns at the height of the pandemic as an oil glut disincentivize production. However, to bring the oil rigs back up requires a protracted period of mobilization of all the resources required to bring output back to pre-Covid levels. There was also an outage at the Trans Forcados terminal, a major export hub for Nigeria.
Nigeria’s production drop as against target is also due to downtime on major pipelines, crude oil theft and several operational challenges leading to production capacity constraints in the assets.
While these challenges persist, indications suggest the situation may be improving with production output expected to grow.
Seplat Energy, an indigenous oil exporter reported in its third quarter results that production was back up following the reopening of the Trans Forcados Pipeline.
“Production has recovered strongly since the outage at Forcados Oil Terminal (FOT) and we have been averaging nearly 33kbopd liquids throughout October. Now that production has normalised, we expect production to be in the range 48-50 kboepd for the year, provided uptime on the Forcados Pipeline and FOT remains above the budgeted 80,” Seplat Energy said.■
Author: Ubah Jeremiah IFEANYI [Nairametrics]