NIGERIA’S total crude oil and condensate production between January and October last year fell by 10.25% to 553.59m barrels from 616.87m barrels in 2019 as a combination of the coronavirus pandemic and forced cuts have hit the sector hard.
With global crude oil prices under strain from the effects of falling demand and the use of alternatives like fracking, members of the Organisation of Petroleum Exporting Countries (Opec) decided to cut output. Things became more urgent last year when the Covid-19 pandemic hurt global industrial production, leading to a further slowing down of demand, forcing Opec to step up its output reduction plan.
As a result, Nigeria’s traditional quota of 2.5m barrels a day was reduced to 1.75m barrels a day, which has in turn hit government revenue hard as over 90% of federal government income comes from crude oil sales. According to the latest Nigerian National Petroleum Company (NNPC) monthly financial and operational report, production fell by over 10% between January and October 2020.
According to the report production in September 2020 was 47.82m barrels, representing a 23% decline from the 62.10m barrels produced in September, 2019. In addition, the data also showed that oil and condensate production for August 2020 was 51.15m barrels, representing a drop of 20.87% when compared with 64.64m barrels produced in August 2019.
For July 2020, production fell by 21.57% to 51.26m barrels, compared with 65.36m barrels in July 2019. Also, oil and condensate production fell by 19.29% in June 2020 to 50.26m barrels compared with 62.72m barrels produced in June 2019.
Of the 49.94m barrels of crude oil and condensate produced in Nigeria annually, joint ventures production and sharing contracts contributed about 30.73% and 38.77% respectively. Alternative funding, the Nigeria Petroleum Development Company and independents account for 11.42%, 9.93%, and 9.15% respectively.