Nigeria’s oil output nears 1.7m bpd 2024 budget benchmark

There were indications that Nigeria has gotten close to meeting its 1.7 million barrels per day, bpd, 2024 budget target, yesterday, as oil output rose month-on-month, MoM, to 1.4 million barrels per day, bpd, excluding condensate, in August 2024, from 1.3 million bpd in July 2024, indicating an increase of 3.4 per cent.

The Organisation of Petroleum Exporting Countries, OPEC, disclosed this in its latest September 2024 Monthly Oil Market Report, MOMR, obtained by Vanguard, adding that the data was based on information from direct communication.

This was even as the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, said the nation recently produced 227,000 bpd of Condensate, meaning the nation’s total output would be more than 1.6 million bpd.

But on a year-on-year, YoY basis, the nation’s output rose to 1.4 million bpd in August 2024, from 1.2 million bpd recorded in the corresponding period of 2023, indicating an increase of 16.7 per cent.

The report showed that Nigeria’s output consistently rose from 1. 276 million bpd in June 2024 to 1.307 million bpd and 1.4 million bpd in July and August 2024, respectively.

According to OPEC, Nigeria remains Africa’s highest oil producer while Congo emerged the least with 270,000 bpd.

However, when data obtained from secondary communication were considered, OPEC maintained that Nigeria’s oil output was slightly higher at 1.44 million bpd during the period, thus enhancing the total production from OPEC-member nations.

It stated: “According to secondary sources, total OPEC-12 crude oil production averaged 26.59 mb/d in August 2024, 197 tb/d lower, m-o-m. Crude oil output increased mainly in Nigeria, Congo, and Venezuela, while production in Libya, Iraq, and Saudi Arabia decreased.

“At the same time, total non-OPEC DoC crude oil production averaged 14.07 mb/d in August 2024, 108 tb/d lower, m-o-m. Crude oil output increased mainly in Mexico and Bahrain, while production in Kazakhstan and Russia decreased.”

However, not much revenue should be expected immediately as the price of Nigeria’s Bonny Light, yesterday, hovered at $71 per barrel, indicating 8.9 per cent below the 2024 budget target of $77.96 per barrel.

Meanwhile, in a telephone interview with Vanguard, the National President, Oil and Gas Service Providers Association of Nigeria, OGSPAN, Mazi Colman, attributed the development to increased battle against oil theft in the Niger Delta.

He said: “Ordinarily, Nigeria can produce over 2.5 million bpd but is currently constrained by some factors, including pipeline vandalism, illegal refining and oil theft.

“As the government and other stakeholders continue their fight against oil theft and conclude divestment of the International Oil Companies, IoCs, assets to indigenous companies, there are indications that the nation’s oil output would continue to rise. But as a nation, we should learn to live beyond oil and gas.”

Data obtained from the August 2014 edition and other Monthly Oil Market Reports, MOMRs, of the Organisation of Petroleum Exporting Countries, OPEC, indicated that the oil output of Nigeria was more than 1.9 million bpd before it started dropping to the current level.

On its part, Shell attributed it to oil theft and other factors, stressing that, “Most oil spills in the Niger Delta region are caused by crude oil theft, the sabotage of oil and gas production facilities, and illegal oil refining, including the distribution of illegally refined products.”