Nigeria’s crude oil underproduction reached 14.88 million barrels in March, $1.488 billion lost due to lack of capacity

Emmanuel Addeh in Abuja

Nigeria has only managed to pump 1.238 million barrels per day despite having a fixed production quota of 1.718 million barrels per day from the Organization of the Petroleum Exporting Countries (OPEC) in March 2022 , according to a new report from the cartel.

At a time when the country is set to mine every dollar it could possibly earn from what could pass as its only source of foreign currency, crude oil, Nigeria, according to a review by THISDAY, has been unable to drill up to 14.88 million barrels for the last time. month.

Nigeria has gone on a borrowing spree as it currently lacks the capacity to shore up its oil production, its main source of foreign exchange, and last week the National Assembly approved N4 trillion as a grant to gasoline for the government led by Muhammadu Buhari for 2022.

According to OPEC’s Monthly Oil Market Report (MOMR), citing direct communication with Nigeria, Africa’s largest oil producer was only able to pump 1.238 million bpd compared to 1.258 million barrels per day. which he produced per day in February.

Placed against the country’s OPEC quota of 1.718 million barrels per day for March, this was a huge shortfall of 480,000 bpd in the month under review.

When these daily losses are calculated for the full 31 days of March, that would be 14.88 million barrels for the entire month and about $1.488 billion at a conservative oil price of $100 a barrel.

While OPEC uses secondary sources to monitor its oil production, it also releases a table of figures submitted by its member nations, one it calls “direct reporting.”

Nigeria was unable to reap the benefits of high international oil prices as it never managed to increase production for more than a year to meet its OPEC quota.

Massive oil theft, outright sabotage, community issues and the country’s inability to restart the oil wells it shut down following the Covid-19 pandemic in 2020 have been blamed for the development .

Even rewards from marginal fields that, if produced, would add to the country’s total production, have largely made only slow progress since the process began, with recipients paying huge interest on their dormant working capital. .

However, the chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) assured last week that the closure of the marginal field award scheme was in sight, with winners expected to move to the site around June.

“Before the first half of the year, we want to see a situation where some of the winners will proceed with the development plan in the field. For the time being still, we have registered almost 90% of the co-beneficiaries training their special purpose vehicles (SPV) and at this stage, it is the very comfortable stage where the commission can move forward to issue petroleum exploration licenses (PPL). )” he assured.

But in total, OPEC-13 crude oil production averaged 28.56 million bpd in March, up just 57,000 month-over-month from February. production increased mainly in Saudi Arabia, Kuwait and the United Arab Emirates, while production decreased in Libya, Nigeria and Congo.

Saudi Arabia increased production by 54,000 bpd to 10.262 million bpd in March, according to secondary OPEC sources, which compares to the 10.331 million bpd quota for Saudi Arabia for March according to the OPEC+ agreement.

The Saudis self-reported crude oil production in March of 10.300 million bpd, while the United Arab Emirates increased production by 23,000 bpd to 2.983 million bpd, against a quota of 2.976 million bpd.

In the same vein, Kuwait’s production increased by 25,000 bpd to 2.639 million bpd, in line with its quota under the OPEC+ agreement.

However, despite Nigeria not meeting its production quota, its rig count increased by two from eight to 10 in March, but averaged five in Q2 2021, 10 in Q3 and seven in Q4 of the same year, but dropped to eight in the first quarter of 2022.

Recently, a study by THISDAY showed that Nigeria was producing much less oil than 25 years ago, while the estimated population was much lower than it is today and government spending was much lower than it was today. what they were in 2022.

A comparison of the country’s average oil production per day in 1997, as reported in the annual statistical bulletin of the Nigerian National Petroleum Corporation (NNPC), showed that if Nigeria pumped 2.344 million barrels per day, plus condensate there is over two and a half decades old, it can hardly produce 1.4 million as of this year.

Moreover, while in 1997 there were 26 rigs in operation, both onshore and offshore, Nigeria currently has only 10 active oil rigs, a number of which are not even in use.

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