Nigeria and Angola contributed to the increase in crude oil output for OPEC-13 members in January 2023, according to OPEC’s monthly oil market report.
Angola’s crude oil output increased from 1,088 million barrels per day (mb/d) in December 2022 to 1,105 mb/d in January 2023, while Nigeria’s crude oil output increased from 1,235 mb/d in December 2022 to 1,258 mb/d in January 2023.
The report also stated that total OPEC-13 crude oil production averaged 28.88 mb/d in January 2023, which is lower by 49 thousand barrels per day on a month-on-month basis.
Despite an increase of 22,833 thousand barrels per day in January 2023, Nigeria’s crude oil production still falls short of its OPEC production quota of 1.8 million bpd and the 2023 budget production target of 1.69 mb/d.
In 2022, the Nigerian National Petroleum Company (NNPC) made significant oil and gas discoveries in Bauchi and Gombe states, as well as Keana in Nasarawa state. These discoveries, according to KPMG experts, will require more crude oil investments in Nigeria.
Oil demand in 2023
The OPEC report stated that oil demand growth in 2023 will depend on the return of China from its mandated mobility restrictions, but concerns persist about the depth and pace of the country’s economic recovery and the consequent impact on oil demand.
- The report also noted that a lot will depend on how the government plans to balance curbing COVID-19 infections versus opening up for business, as well as other factors such as inflation levels, monetary tightening measures, sovereign debt levels, and geopolitical tensions.
Challenges remain
The African Energy Chamber (AEC) released a report in October 2022 that Nigeria is a significant crude oil producer on the continent, but it still faces issues such as a lack of fiscal reforms, pipeline vandalism, and crude oil spills and pollution. The report also suggests that Namibia, which has recently evaluated crude oil discoveries by Shell and TotalEnergies, has higher promise as a producer than Nigeria.
- Nigeria’s national security adviser, Major General Babagana Monguno, warned in December 2022 that the Federal Government could lose up to $23 billion in 2023 if crude oil theft in the nation continues.
- In January 2023, Nigeria produced 187,180 bpd of unblended condensates and 48,978 bpd of blended condensates, in addition to its crude oil output, which brings the overall crude oil production rate for the country to 1,494,308 mb/d.