THE outlook for Nigeria’s oil output, including condensate, remains gloomy at 1.4 million barrels per day, mbpd, in the second half of 2024, according to industry data and forecast.
The output forecast is far below the 1.8mbpd quota given to Nigeria by the Organisation of Petroleum Exporting Countries, OPEC, as well as the 1.7mbpd stated as 2024 budget benchmark by the Federal Government.
This indicates oil revenue shortfall of about N1 trillion against the 2024 budgetary expectations.
The data obtained from the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, June 2024 report – Crude Oil and Condensate Production – indicated that on month-on-month, MoM, the nation’s oil output, excluding Condensate dropped by 2.3 per cent to 1.25 million bpd in June 2024, from 1.28 million bpd in April 2024.
The data indicated that the nation’s oil output continued its downward trend from January 2024 when it recorded 1.6 million bpd, before falling to 1.5 million bpd, 1.4 million bpd and 1.3 million bpd in February, March and April 2024, respectively.
Since then, the NUPRC’s report indicated that the output has not recovered as it hovered at 1.3 million bpd and 1.4 million bpd in April and May 2024, respectively.
OPEC disclosed that Nigeria’s oil output, excluding Condensate, remained flat at 1.2 million bpd in May 2024 and 1.2 million bpd, in April 2024.
In its June 2024 Monthly Oil Market Report, MOMR, obtained by Financial Vanguard, OPEC noted that the data were based on information obtained from direct or official sources.
But when secondary sources were considered, OPEC put Nigeria’s oil output in May 2024, at 1.4 million bpd, excluding Condensate.
Similarly, there are indications that oil exploration, which culminates in production also dropped month-on-month, MoM, by 15.8 per cent, in May 2024, due mainly to limited investment.
The latest Monthly Oil Market Report of the OPEC indicated that the nation’s rig count, a major indicator of upstream activities, declined to 16 in May 2024, from 19 in April 2024.
Although OPEC did not provide factors responsible for the development, checks by Financial Vanguard pointed to limited production activities in Nigeria during the period.
Outlook not looking bright – Zakka
In a telephone interview with Financial Vanguard, an energy expert, Dr. Bala Zakka, said: “The outlook does not look bright in the short and medium term because the facts are there. For instance, the rig count, an index of measuring activities have not been rising, but falling.
“Every day, my colleagues and I in Nigeria and other parts of the world discuss this and other issues. The conclusion we have does not point towards the possible high oil output in the second half of 2024.”
Similarly, an energy analyst, who pleaded to be anonymous, said: “Nigeria might not still be able to meet its output targets in the remaining part of the year. This would likely impact negatively on the budget.”
Nigeria need to reduce, end oil theft – Ayuk
On his part, NJ Ayuk, Executive Chairman of the African Energy Chamber, stated: “When you take a look at the African Energy Chamber’s Nigeria’s month-on-month output so far in 2024 you can predict on second half of 2024, H2’24, forecast. In the short term, the forecast might not be so volatile or declining that we need some efforts to stabilize the production. For Nigeria, it would be making sure that oil theft is minimised, no pipeline vandalism/sabotages happen and infrastructure damages are avoided so as to rule out any steep drops in the monthly output.
“In the longer term, however, Nigeria can go into a terminal decline similar to Angola if the existing issues are not sorted out.
‘‘It is true that indigenous players will play a much bigger role in the onshore/swamp/shallow water regions as International Oil Companies, IOCs, continue to divest. But any obstructions to oil flows in the Niger Delta due to any damages to infrastructure should be avoided and oil theft minimized.
“It remains interesting to see the scale of development these (relatively) smaller players can bring as opposed to some of these blocks lying dormant with IOCs. ‘‘Production trend reversal, however, is largely dependent on the deepwater finds where majors are still present and the administration will need to facilitate better business and economic environment for the majors to bring these finds onto the drawing board in Nigeria’’.
We can produce more with 37bn oil reserves – Iledare
Wumi Iledare, Professor Emeritus in Petroleum Economics, said: “We have 37 billion barrels of reserves. The operators are competent and with improved and proper implementation of PIA 2021 as well as transparency, accountability, and good governance, it should be possible to increase oil output.”
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