Nigeria’s Oil Production Rises Amidst Ongoing Challenges
The Nigerian Upstream Petroleum Regulatory Commission’s Chief Executive, Gbenga Komolafe, has announced that the country’s average daily oil production has increased to 1.61 million barrels per day as of July 23. This comes just two weeks after the commission reported an average daily oil production of 1.25 million barrels for June.
Komolafe made the disclosure during a two-day public/investigative hearing on oil theft/losses held by the House of Representatives Special Committee. The country has been facing significant challenges regarding crude oil theft and pipeline vandalism, particularly affecting terminals in the Niger Delta region such as Bonny, Brass, and Forcados.
According to Komolafe, the commission has taken steps to address these challenges, including employing end-to-end production monitoring and a mass balance methodology to accurately account for losses and differentiate them from operational losses. As a result, zero incidents of theft were reported in July 2023.
The development comes amid a domestic crude oil supply challenge facing the 650,000 barrel per day Lagos-based Dangote Refinery. The refinery has been seeking alternative crude supplies from the United States, Brazil, and Libya to meet its demand, with plans to commence fuel supply in August 2024.
The Nigerian National Petroleum Company Limited has previously reported losing $700 million every month to oil theft, while the Nigerian Extractive Industries Transparency Initiative has stated that the country lost 619.7 million barrels, valued at N16.3 trillion, to crude oil theft from 2005 to 2021. In 2023, the NNPC spent N136 billion on security, repairs, and maintenance of vandalized infrastructure.
The ongoing efforts to address oil theft and pipeline vandalism are crucial in ensuring the country’s oil production and revenue goals are met. With the Dangote Refinery set to commence fuel supply in August, Nigeria’s oil industry is poised to experience significant changes in the coming months.
