THE outlook for Nigeria’s oil output, including condensate, remains gloomy at 1.4 million barrels per day, mbpd, in the second half of 2024, according to industry data and forecast.
The output forecast is far below the 1.8mbpd quota given to Nigeria by the Organisation of Petroleum Exporting Countries, OPEC, as well as the 1.7mbpd stated as 2024 budget benchmark by the Federal Government.
This indicates oil revenue shortfall of about N1 trillion against the 2024 budgetary expectations.
The data obtained from the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, June 2024 report – Crude Oil and Condensate Production – indicated that on month-on-month, MoM, the nation’s oil output, excluding Condensate dropped by 2.3 per cent to 1.25 million bpd in June 2024, from 1.28 million bpd in April 2024.
The data indicated that the nation’s oil output continued its downward trend from January 2024 when it recorded 1.6 million bpd, before falling to 1.5 million bpd, 1.4 million bpd and 1.3 million bpd in February, March and April 2024, respectively.
Since then, the NUPRC’s report indicated that the output has not recovered as it hovered at 1.3 million bpd and 1.4 million bpd in April and May 2024, respectively.
OPEC disclosed that Nigeria’s oil output, excluding Condensate, remained flat at 1.2 million bpd in May 2024 and 1.2 million bpd, in April 2024.
In its June 2024 Monthly Oil Market Report, MOMR, obtained by Financial Vanguard, OPEC noted that the data were based on information obtained from direct or official sources.
But when secondary sources were considered, OPEC put Nigeria’s oil output in May 2024, at 1.4 million bpd, excluding Condensate.
Similarly, there are indications that oil exploration, which culminates in production also dropped month-on-month, MoM, by 15.8 per cent, in May 2024, due mainly to limited investment.
The latest Monthly Oil Market Report of the OPEC indicated that the nation’s rig count, a major indicator of upstream activities, declined to 16 in May 2024, from 19 in April 2024.
Although OPEC did not provide factors responsible for the development, checks by Research pointed to limited production activities in Nigeria during the period.
we need some efforts to stabilize the production. For Nigeria, it would be making sure that oil theft is minimised, no pipeline vandalism/sabotages happen and infrastructure damages are avoided so as to rule out any steep drops in the monthly output.
“In the longer term, however, Nigeria can go into a terminal decline similar to Angola if the existing issues are not sorted out.
‘‘It is true that indigenous players will play a much bigger role in the onshore/swamp/shallow water regions as International Oil Companies, IOCs, continue to divest. But any obstructions to oil flows in the Niger Delta due to any damages to infrastructure should be avoided and oil theft minimized.
“It remains interesting to see the scale of development these (relatively) smaller players can bring as opposed to some of these blocks lying dormant with IOCs. ‘‘Production trend reversal, however, is largely dependent on the deepwater finds where majors are still present and the administration will need to facilitate better business and economic environment for the majors to bring these finds onto the drawing board in Nigeria’’.