• Sunday, May 19, 2024
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BusinessDay

Nigeria loses top spot to Libya as oil output dips

Charting the course– who dares, who wins?

…Production hits lowest in eight months

Libya overtook Nigeria to emerge the top African crude oil producer in March, data from the Organization of Petroleum Exporting Countries (OPEC) has shown.

The North African country recorded 1.24 million barrels per day (bpd) of crude production in March, a 5.7 increase from 1.17 million bpd in February, according to the April 2024 Monthly Oil Market Report published by the oil cartel.

Read also: Libya overtakes Nigeria as oil output hits eight-month low

But Nigeria recorded an output of 1.23 bpd in March, the lowest since July 2023, down from 1.32 million bpd in February.

The drop of almost 91,000 bpd, according to direct communication to OPEC, underscores the difficulties the Nigerian oil sector faces, such as limited infrastructure, security breaches in oil-producing areas, and operational hiccups.

Experts said large-scale oil theft from pipelines and wells has been one of President Bola Tinubu’s biggest challenges in recent years, dampening government finances and limiting the country’s output and exports.

“We aren’t curbing oil theft nor are we taking or making quick wins at our wells that need to be boosted or optimised,” Jide Pratt, country manager at Trade Grid and an energy analyst. “We have lost another 100,000bpd; what are Gabon, Saudi and Kuwait doing that we need to copy to increase production?”

Last month, the Nigerian National Petroleum Company Limited (NNPC Ltd) appealed to the Economic and Financial Crimes Commission (EFCC) to help tackle the menace of crude oil theft in the country.

Speaking about the efforts by NNPC Ltd to eradicate corruption from its system and stem crude oil theft and pipeline vandalism, Mele Kyari, the group chief executive officer of the company, contended that going by the volume of oil stolen daily and the brazenness with which the perpetrators operate, crude oil theft was the most humongous and virulent economic crime in Nigeria that must attract the attention of the EFCC.

“As we continue to do our best to deepen transparency and stamp out corruption from the system, there is one big challenge that you will need to help us with. That challenge is crude theft,” Kyari said at an interactive session with Ola Olukoyede at the NNPC Towers in Abuja.

In recent years, Nigeria has recorded a surge in pipeline vandalism and crude oil theft incidents in its oil-producing region, a development that worsened the nation’s revenue challenge.

Read also: Nigeria risks missing out as $100 oil beckons

To curb crude theft, the NNPC Ltd launched an application in August 2022 to monitor the incidence of theft and vandalism. The NNPC Ltd also awarded a multibillion-naira pipeline surveillance and procurement to a former leader of the Movement for the Emancipation of Niger Delta, Government Ekpemupolo.

Despite such initiatives, Nigeria continues to experience significant oil losses to vandals, prompting several international oil companies to shift from the onshore sector to offshore.

Experts said the reduction in Nigeria’s crude oil production coincides with production cuts being implemented by OPEC and its allies, notably Russia, in an effort to stabilise the world oil markets and maintain prices.

To guarantee that agreed-upon quotas are being followed, the OPEC+ group, headed by Saudi Arabia, has been closely watching the output levels of its members.