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Why oil production dropped for 2 months – Lokpobiri

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The Minister of State Petroleum Resources (Oil), Senator Heineken Lokpobiri has explained that the drop in oil production in February and March 2024 was caused by issues encountered on the Trans Niger Pipeline, coupled with maintenance activities carried out by some oil companies operating in the country.

March oil production data released by the Nigerian Upstream Regulatory Commission (NUPRC), yesterday showed that production fell for the second consecutive month to 1.438 million barrels per day compared to 1.539 million barrels and 1.643 million barrels per day recorded in February and January respectively. The figures include condensate oil production. The production volume fell significantly short of the 1.78 million barrels per day contained in the 2024 budget.

Lokpobiri in a statement by his media aide, Nnemaka Okafor assured that measures were being taken to address the situation to “not only restore production to previous levels, but to also increase it”.

According to the statement, “The Minister is also pleased to announce that the issues have been adequately addressed, and production is expected to return to its previous levels in the coming days.

“He anticipates that Nigeria’s oil production, including condensate, which was approximately 1.7 million barrels per day (bpd) before these developments, will soon be restored.

“Furthermore, the Ministry of Petroleum Resources is actively engaged in policy evolution aimed at maximizing the utilization of all available wells in Nigeria. This strategic approach will enable the country to ramp up production, thereby generating vital revenue to stabilize the nation’s foreign exchange reserves. The increased revenue will also empower the government to fulfil its commitments in providing essential infrastructure, as outlined in the 2024 budget”, the statement added.

Meanwhile, Libya has emerged as the highest crude oil producer in Africa following the drop of Nigeria’s output by 6.8 per cent to 1.23 million barrels per day (bpd), in March 2024, from 1.32 bpd in February 2024.

On the other hand, Libya’s oil output rose by 5.4 per cent to 1.236 million bpd in March 2024, from 1.173 million bpd in February 2024, according to the Organisation of Petroleum Exporting Countries (OPEC).

OPEC, a permanent intergovernmental organization of 12 oil-exporting developing nations that coordinates and unifies the petroleum policies of its Member Countries, which disclosed this in its April 2024 Monthly Oil Market Report (MOMR), obtained by newsmen, said the output was based on data it obtained from official sources in Nigeria.

Based on secondary sources, OPEC, stated, that Nigeria retained its leadership position in the continent as it produced 1.398 million bpd while Libya produced 1.161 million bpd, during the period.

OPEC stated: “According to secondary sources, total OPEC-12 crude oil production averaged 26.60 mb/d in March 2024, 3 tb/d higher, m-o-m. Crude oil output increased mainly in IR Iran, Saudi Arabia, Gabon and Kuwait, while production in Nigeria, Iraq and Venezuela decreased”.

Meanwhile, the Federal Government has expressed concerns over the capacity of the industry to meet its domestic crude obligations to local refineries, insisting that supply to local refineries remain a priority.

Speaking at a meeting to review Domestic Crude Oil Supply Obligation as contained under Section 109 (2) of the Petroleum Industry Act, PIA 2021, the Chief Executive, of Nigerian Upstream Petroleum Regulatory Commission, Engr. Gbenga Komolafe insisted that priority must be given to crude supply to local refineries. Komolafe pointed out that the overall objective of the government was to ensure that Nigeria became a net exporter of refined petroleum products.

“Producers should satisfy their domestic crude oil supply to the domestic refineries so that as a nation we seize the opportunity to reverse the ugly trend by ensuring that we develop our midstream and end being a net exporter of petroleum products, especially now that we are trying to exit the subsidy regime. The only way to sustain that is to become robust in our domestic refining capacity”.

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