OPEC reports another decline in Nigeria's oil production, now standing at 1.23 million barrels per d
According to OPEC's latest Monthly Oil Market Report for April 2024, Nigeria's crude oil production experienced a second consecutive monthly decline, falling to 1.231 million barrels per day in March. This decline marks a drop from the 1.322 million barrels per day produced in February. Data obtained directly from Nigeria indicated a consistent reduction in oil production, with January recording 1.427 million barrels per day, followed by a decrease to 1.322 million barrels per day in February, and a further decline to 1.231 million barrels per day in March.
According to OPEC data, Nigeria's average crude oil production in the first quarter of 2024 stood at 1.327 million barrels per day (mbpd), showing an increase from the 1.313 mbpd recorded in the fourth quarter of 2023. Additionally, the first quarter production surpassed the 1.201 mbpd average output in the third quarter of the previous year.
However, challenges such as oil theft and pipeline vandalism have significantly impacted Nigeria's oil production, leading to a reduction in output. These factors have constrained the country's oil production, causing it to fall below the volume approved for Nigeria by OPEC.
During a one-week period, the Nigerian National Petroleum Company Limited (NNPCL) documented 155 incidents of oil theft. According to the company's report, this timeframe saw the discovery of 53 illegal pipeline connections and 36 illegal refineries in the Niger Delta region.
"Between March 30 and April 5, 2024, a total of 155 incidents were recorded across various locations in the Niger Delta region," stated the firm.
The summary of incidents outlined by NNPCL includes the discovery of 53 illegal connections, 36 illegal refineries, and 32 wooden fiber boats. Additionally, the report identified 14 cases of pipeline vandalism, eight vessel infractions, and four oil spills. Moreover, seven vehicle arrests and one vessel arrest were made during this period.
Several incident sources were identified, including the Nigeria Agip Oil Company, Tantita Security Services Ltd, NNPCL Command and Control Centre, Shell Petroleum Development Company, and NNPCL 18 Operating Ltd, among others.
The company provided further information, stating, "In the past week, 32 wooden boats transporting stolen crude oil and illegally refined products were apprehended and confiscated in Rivers and Delta states."
Seven vehicles carrying stolen crude oil were intercepted on land in Imo, Delta, and Rivers states. Additionally, a total of 53 illegal connections were detected between March 30 and April 5, 2024, spanning across Bayelsa, Rivers, and Delta states.
In Rivers, Bayelsa, and Delta states, 14 cases of vandalism were reported, while illegal storage sites housing stolen crude oil and illegally refined products were uncovered in Akwa Ibom, Bayelsa, Rivers, and Delta states.
The national oil company also identified clusters of illegal refineries in Abia State, with 36 such clusters found in various locations in Rivers and Abia states during the past week.
Additionally, four cases of oil spills resulting from vandalism activities were recorded, with one instance in Rivers State causing damage to aquatic life due to leaks from a wellhead.
During the week under review, NNPCL reported the arrest of 38 suspects, reaffirming the national oil company's unwavering commitment to combatting crude oil theft until it is completely eradicated.
Nigeria has suffered significant financial losses due to crude oil theft, prompting some international oil companies to shift focus from onshore to deep offshore oil fields or exit the country altogether. For instance, in November 2023, the Federal Government disclosed that over N4.3 trillion worth of crude oil was stolen in 7,143 pipeline vandalism incidents over a five-year period.
The government made this revelation during the Nigeria International Pipeline Technology and Security Conference in Abuja, themed 'Bolstering Regulations, Technology, and Security for Growth,' organized by the Pipeline Professionals Association of Nigeria.
During a presentation by the Nigeria Extractive Industries Transparency Initiative (NEITI), a Federal Government agency, it was disclosed that oil theft and losses in Nigeria had reached a critical level, constituting a national emergency.
Ogbonnaya Orji, the Executive Secretary of NEITI, emphasized that oil theft posed a significant threat to oil exploration and exploitation, with substantial adverse effects on economic growth, business opportunities, and profit margins for oil companies.
Citing data from the agency's reports to substantiate his assertions, he stated, "NEITI revealed that between 2017 and 2021, Nigeria experienced 7,143 incidents of pipeline ruptures and intentional vandalism, leading to the theft of crude oil and losses of 208.639 million barrels valued at $12.74 million or N4.325 trillion.
"NEITI reports further indicated that during this period, Nigeria expended N471.493 billion on pipeline repairs and maintenance."
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