Controversy seems to have enveloped the oil industry as Nigeria’s two major oil industry authorities, the Nigerian Upstream Regulatory Commission, NUPRC, and the Nigeria National Petroleum Company Limited, NNPCL, have reported contradictory figures on Nigeria’s actual oil output last month, April 2024.
While NNPCL is giving 1.7 million barrels per day (mbpd) NUPRC is showing 1.28mbpd.
The figure is crucial for both budget funding and fiscal transparency.
The discrepancy amounting to 398,000 barrels could yield a revenue difference of over N47.76 billion in the month of April, 2024 .
Meanwhile, the NUPRC has indicated that Nigeria’s crude oil production in the month of April, 2024, rose marginally by four percent to 1.28 million barrels per day compared to 1.23mbpd recorded in March.
Also the NUPRC data shows that Nigeria’s oil production in the first four months of this year fell short of the 2024 Budget target of 215.38 million barrels by 32.63 million barrels or 17.85 percent.
Data obtained by Energy Vanguard showed that volume oil production in the first four months of the year was 182.75 million barrels, representing just 84.8 percent of the Federal Government’s oil production projections for the period.
In the 2024 appropriation, the government benchmarked its oil revenue at 1.78 million barrels per day production but the data showed that average oil production in the first four months was 1.515 million per day.
The monthly production figures showed that 50.95 million barrels were produced in January 2024, 44.22 million barrels in February, 44.58 million barrels in March and 43.42 million barrels in April.
The data however showed marginal improvement of 4.16 percent over a similar period in 2023 where oil production was 175.44 million barrels in the first four months.
Why production declined — Kyari
Offering an explanation for the industry’s failure to meet government’s oil production target, the Group CEO, NNPC Limited, Mele Kyari pointed at oil theft and rising cases of pipeline vandalism.
Kyari who spoke at a Stakeholders’ Engagement Session organized in Lagos by the Nigerian Association of Petroleum Explorationists, NAPE, said years of underinvestment have also impacted on the industry’s capacity to ramp up production.
He said: “How do you increase oil production? Remove the security challenge we have in our onshore assets. As we all know, the security challenge is real. It is not just about theft, it is about the availability of the infrastructure to deliver the volume to the market.
“No one is going to put money into oil production when he knows the production will not get to the market. Within the last two years, we removed over 5,800 illegal connections from our pipelines. We took down over 600 illegal refineries – cooking pots or whatever they were. You simply cannot get people to put money until you solve that problem.
“I can see a number of people who have got marginal fields. Yes, they are drilling, but they are concerned about how to take the production to market. Everybody is thinking of barging. We know barging is an abnormality. Nobody is going to spend at least $7, in some cases, $21 to transport a barrel of oil to the terminal. So, barging is not normal, barging is not economical, but that’s what we are doing today.
“But the good news is that there is substantial work that is being done by the government that I’m aware of. Nobody speaks about it. But I know that this will come to pass. It’s already subsiding. We are already seeing the results.
“I know I cannot promise two million barrels per day. It’s not possible today. But is it practical? Yes. As at today’s data, we are inching close to 1.7 million barrels per day. Should we celebrate this? No. And I can tell you why. On April 17, 2020, without drilling new wells, our production shot up to 2.5 million barrels a day.”
The Minister of State Petroleum Resources (Oil), Senator Heineken Lokpobiri had explained that the drop in oil production in the last few months was caused by issues encountered on the Trans Niger Pipeline, coupled with maintenance activities carried out by some oil companies operating in the country.
Lokpobiri in a statement by his media aide, Nnemaka Okafor assured that measures were being taken to address the situation to not only restore production to previous levels, but to also increase it.
He said: “The Minister is also pleased to announce that the issues have been adequately addressed, and production is expected to return to its previous levels in the coming days.
“He anticipates 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”.
