• Wednesday, April 17, 2024
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BusinessDay

Nigeria’s oil production hits 1.35m bpd, highest in 8 months

Nigeria’s oil production rose to an 8-month high of 1.35 million barrels per day helping to push OPEC production to 150,000 barrels daily according to a Bloomberg survey.

Total production by the cartel amounted to 29.14 million barrels per day with Nigeria accounting for the entire new production.

This development suggests that the Nigerian government crackdown on oil thieves may be yielding some positive results.

In a media briefing last August, Mele Kyari, group chief executive of the Nigerian National Petroleum Corporation (NNPC) Limited said the corporation has contracted private security firms including one linked to Government Ekpemuopolo, popularly called Tompolo, a former Niger Delta militant, to protect the pipelines.

Read also: Nigeria’s oil production to climb as Green Energy targets 25,000 bpd

Though Nigeria’s output has risen to 1.35m bpd, it is still half of the volume pumped a decade ago.

Rampant crude theft and uncertain fiscal and regulatory frameworks have stalled investments in the sector.

Under Investments have crippled production and the country does not look attractive for investors, especially multinationals who are seeing better opportunities elsewhere.

Data from the National Bureau of Statistics (NBS) showed foreign investment inflows into Nigeria’s oil and gas sector has also dropped by multiple folds.

Foreign investment inflows into the oil and gas industry, which stood at $200m in the second quarter of 2016, have declined to $1.9 million in the corresponding period of 2022, indicating a 99 percent drop.

The oil and gas sector, which is the economy’s lifeblood, contributed 5.66 percent to the country’s total real gross domestic product (GDP) in Q3 2022 despite fetching over 95 percent of the country’s export earnings.

While production is rising in Nigeria, elsewhere OPEC and its allies are sticking with production caps agreed last year to keep global markets in balance.

Countries like Saudi Arabia, the United Arab Emirates and Iraq have kept supplies roughly the same production levels with Saudi pumping 10.48 million barrels a day, according to Bloomberg data.

OPEC and its allies, a 23-nation bloc known as OPEC+, agreed to collectively reduce supplies by 2 million barrels a day from November, and then hold steady for the rest of this year.

Meanwhile, African exporter Angola is struggling to keep up. Bloomberg data shows the 10 OPEC nations bound by quotas are pumping 650,000 barrels a day below their collective target.