In a recent Bloomberg survey conducted on November 1, 2023, Nigeria emerged as the leader in boosting oil production among OPEC nations for the month of October 2023.
The survey highlighted that several African members of OPEC witnessed modest increases in their crude oil production during this period, with Nigeria at the forefront of this surge.
According to Bloomberg’s findings, the Organization of Petroleum Exporting Countries (OPEC) collectively averaged 28.08 million barrels per day in oil production for October. This marked a slight increase of approximately 50,000 barrels per day compared to September 2023.
Notably, Nigeria played a significant role in driving this rise in production, with other contributors including Congo, Gabon, Angola, and Equatorial Guinea.
OPEC is currently evaluating the production capacities of several member countries, a process that might potentially lead to adjustments in their output quotas for the year 2024.
During October, Nigeria increased its daily oil output by 60,000 barrels, reaching 1.49 million barrels per day. This level represents the highest production figure in nearly two years. However, it remains below Nigeria’s targeted production aspirations, leaving questions about whether this increase will suffice to prompt a revision in the production quota.
Bloomberg’s report highlighted that while African OPEC members saw production increases in October, there were fractional reductions observed in countries like Iran, Iraq, Kuwait, and Libya, which somewhat counteracted the overall upswing in production.
It’s worth noting that Nigeria has expressed its desire to elevate its production to previous levels in order to secure a higher production quota.
The exact reasons for the decline in Nigeria’s crude oil production have been a subject of debate within the industry. Some attribute the decline to crude oil theft, which they believe has escalated over the years. Conversely, a few others accuse certain operators and the Nigerian National Petroleum Corporation (NNPC) of promoting a false narrative of crude oil theft to justify security contracts awarded to former militants in the Niger Delta region.
Recalling the recent history of Nigeria’s crude oil production, the country hit its peak at 2.5 million barrels per day in the year 2000. However, by August 2023, this had declined to 1.1 million barrels per day. The data reveals fluctuations, including a high of 2.52 million barrels per day in 2005, followed by a gradual decline to 1.89 million barrels per day in 2016.
While there were minor recoveries in 2017 and 2018, by 2022, production had dropped to 1.45 million barrels per day, further plummeting to 972,000 barrels per day in August 2022 due to increased theft. In 2023, production fluctuated, ranging from 1 million barrels per day in April to a peak of 1.26 million barrels per day in March. In September 2023, the country pumped 1.3 million barrels per day (excluding condensates), according to the Nigerian Upstream Petroleum Regulatory Commission.
It’s important to note that from 2024, Nigeria is set to adopt OPEC’s revised oil production quota of 1.38 million barrels per day. Nevertheless, stakeholders believe that Nigeria has the potential to catch up with its production quota before that time, and OPEC could consider revising the quota upward.
This development in Nigeria’s oil production will continue to be closely monitored, as it has implications for both the country’s economy and OPEC’s global oil production dynamics.
