After consistently failing to meet OPEC’s production quota of 1.830 million barrels per day (bpb), oil production in Nigeria has finally risen to 1.6 million bpb.
According to the Chief Upstream Investment Officer of NNPC Upstream Investment Management Service, Bala Wunti, Nigeria’s production capacity increased to 1.6 million bpd from 937,000 bpd reported in September.
Wunti also noted that the increase was possible following the government’s clampdown against crude oil theft in the country, through the combined efforts of security agents.
The increase in production capacity indicates that Nigeria’s ability to meet and even surpass the OPECs quota is not farfetched and impossible. But can the country hit the 2.5 million bpd mark, its supposed production capacity?
Clampdown on Oil Theft: The recent efforts of the government to clamp down on oil theft have witnessed some significant success.
Although oil theft has been going on in the country for over two decades, there was a recent surge in illegal activities, leading to a massive loss for the country.
- The NNPC’s Chief Executive Officer Mele Kyari, earlier reported that Nigeria loses around 600,000 barrels per day to oil theft.
- The losses also prompted actions from the government. The Nigerian Navy launched “Operation Dakarta Da Barawo”, an award of a multi-million pipeline surveillance project to a former warlord, Government Empemupolo also known as Tompolo, launching an application to monitor incidence, coupled with collaborative efforts of other security agents has seen a reduction in oil theft, and discover of illegal pipelines operating for years.
- A further clampdown and intensified efforts against oil theft will increase oil production in the country, as stolen oil which is not accounted for as part of the country’s production will now count.
Opening of oil pipelines: The shutting off of oil pipelines led to a decrease in oil production. According to reports, 13 of 29 oil terminals in the country have witnessed a significant drop. Some of the worst-hit terminals are Bonny, Brass, and Forcados, which saw production output reduce by 79%, 40.5%, and 96.5%.
- The Chief Executive of the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, noted that the re-streaming of the Forcados pipeline, one of the major pipelines in the country, could add 400,000 barrels per day to the production capacity of the country.
- Also, the re-streaming of pipelines such as the Trans Niger pipeline with a production capacity of 180,000 would add to the daily production in the country.
Kolmani Oil Field: In November 2022, president Muhammad Buhari flagged off the first crude oil drilling in the north. The Kolmani River Field is set to add one billion barrels and 500 billion cubic feet of gas to national reserves.
According to projections, the oil field is expected to start with a daily production of 50,000 barrels. When added to the existing daily production output, the Kolmani River Field barrels will increase the production capacity of the country.
Investment from players: The Nigerian government should be open to investment as capital expenditure will see us boost our current oil production.
With the right investment and technology deployed into the oil sector, Nigeria can increase its production capacity beyond OPEC’s quota, surpassing the 2.5 million barrels per day highlighted above.