The African Energy Chamber (AEC) has said that Nigeria’s crude oil production is expected to grow to 1.75 million barrels per day (bpd) in 2023. The AEC stated this in its State of African Energy report, released on October 26.
According to AEC, Nigeria’s crude oil production is expected to grow from 1.65 million bpd in 2022 to about 1.75 million bpd in 2023. The report highlighted the fact that although there were outages recorded in the country’s crude production in 2022, which saw Angola overtake it as the largest crude oil producer on the African continent, production rates would increase in the coming year.
- The report states: “African crude oil and condensates output is expected to stay at a flat 8% of the global volumes hovering at 7 – 7.1 million bpd over the next 18 months.”
Other crude oil producers: Libya’s output is expected to rise to 1.3 million bpd in 2023 from 1.12 million bpd in 2022. Algeria is expected to stay flat at about 1.2 million bpd over the period, while Angola is expected to marginally decline from 1.13 million bpd in 2022 to about 1.1 million bpd in 2023.
The AEC estimates 2022 global crude oil production at 81.16 million bpd while projecting 2023 flows at a higher 85.3 million bpd. Note that Libya outages drew down African liquids output in the first half (H1) 2022 but supply is expected to be stable at 7 – 7.1 million bpd through the remainder of 2022 and 2023.
Brent crude prices: The AEC report states that due to the ongoing Russia-Ukraine war, and weakened supply, occasioned by many companies’ exit from Russia and the European Union (EU) embargo on Russian supply, Brent crude price forecast through 2025 is expected at much higher levels of US$77/barrel, US$79/barrel and US$81/barrel respectively for 2023, 2024 and 2025. This is in contrast to much lower levels of US$57/barrel, US$52/barrel, and US$55/barrel expected for 2023, 2024, and 2025 previously.
African oil condensates: Africa’s oil condensates output forecast through the decade is expected to stay unchanged in the near term and see a marginal upward revision in the second half of the decade. 2022 annual average is expected at about 6.95 million bpd and 2023 is expected to see a small increase to just over 7 million bpd.
If the civil unrest in Libya subsides and new fields elsewhere on the continent come online, Africa is expected to see gradual growth in output through the second half of this decade and be able to reach an average crude oil + condensate production of close to 7.25 million bpd by 2030.
Aside from in-country dynamics, the AEC estimates that Nigeria, Libya, Algeria, and Angola round off the top 4 oil and condensates producers in Africa for the years 2022 and 2023 and are the only 4 countries in Africa to surpass a cumulative annual average of 2 million bpd.
Nigeria’s in-country dynamics: The AEC report outlines some challenges facing Nigeria’s production output as follows: a lack of fiscal reforms eventually leading to a lack of deep-water developments, disagreements between International Oil Companies (IOCs) operating in the Niger Delta and local administrations, pipeline vandalism, crude oil theft, crude oil spills, and pollution. However, these issues have not affected Nigeria’s hydrocarbon output.
Overall hydrocarbon output: The Nigerian National Petroleum Company (NNPC) Limited, Algeria’s National Oil Company (NOC); Sonatrach, and Libya’s National Oil Corporation, are the top three NOCs in Africa in terms of overall hydrocarbon output. NNPC Limited is expected to reach output levels of 1 million barrels of oil equivalent per day (boepd) for 2022 – 2023. As projects where NNPC Limited holds stakes see some redevelopments and reach the start-up milestone, NNPC is expected to see a production increase to 1.2 million boepd by the end of this decade.