- Says crude oil theft an end-to-end issue in Nigeria
- Nigeria’s oil production falls to 1.32 mb/d in February – OPEC
The Group Managing Director of the Nigerian National Petroleum Corporation Limited, Mele Kyari, revealed on Wednesday that the corporation recorded 9,000 infractions on its pipelines within one year.
Kyari made this disclosure while addressing the House of Representatives’ Special Committee on Oil Theft, led by Alhassan Ado-Doguwa, during an oversight function at the NNPCL headquarters in Abuja.
He stated that “From 2022 to date, we have deactivated 6,465 illegal refineries. We have also removed 4,876 illegal connections to pipelines out of 5,570 that we have discovered.”
Kyari added that the NNPC was uncertain if that was the actual number, mentioning that there were still approximately a thousand connections that the corporation knew had not yet been removed.
“Some of the scale of the infractions that we see is unbelievable; we are not able to deal with it. When you remove one connection, the next day in the same location, someone will replace it.
“It is evident that crude oil theft is almost an end-to-end issue in Nigeria; it is apparent that everyone is involved. In most of these locations, they are less than a hundred meters from the settlement; some are even less than a hundred meters from the Local Government headquarters.”
He emphasized that despite the distance, these illegal activities continued unabated, making it impossible to guarantee production for the next day.
Kyari highlighted security as the key issue and mentioned that the NNPCL moved to curtail the menace of pipeline vandals by incorporating all security agencies into a single platform, including private security.
He emphasized, “No country surrenders the protection of such critical assets, which is our source of income, to non-state actors.”
The Chairman of the Special Committee, Alhassan Ado-Doguwa, expressed concern over the challenges faced in operating oil and gas pipelines in Nigeria, stating that infractions or damages to pipelines occur almost on a daily basis.
He also addressed the opacity and lack of transparency in regulatory activities at crude oil export terminals, highlighting instances of undeclared lifting and approvals hastily granted to vessels involved in crude theft, contributing to the huge volume of crude oil theft reported.
Ado-Doguwa emphasized that Nigeria has been bedeviled by crude oil theft and pipeline vandalism of enormous proportions, primarily within the Niger Delta region.
Nigeria’s crude oil production falls to 1.32 mb/d in February – OPEC
Meanwhile, Nigeria’s crude oil production dropped to 1.32 million barrels per day in February from the 1.42-million-barrel oil daily production in January, a drop of 104,000 barrels per day.
This is according to OPEC’s monthly oil market report (MOMR).
The figure for the month was based on direct communication from Nigeria to OPEC’s authorities.
However, based on secondary sources, Nigeria recorded a daily crude oil production of 1.47 million barrels for February. This represents an increase of 47,000 barrels of oil per day.
Although crude oil production dropped for the month, Nigeria still retained its position as Africa’s biggest oil producer among the continental members of OPEC.
Nigeria’s closest rival on the continent was Libya whose oil production for the month stood at 1.17 mb/d followed by Algeria which produced 906,000 barrels daily.
According to the report, the global oil production for 2024 from non-OPEC producers is expected to grow by 1.1 million barrels daily while that from OPEC countries is projected to grow by 64,000 barrels daily averaging around 5.5 million barrels for the year.
For February, oil production from OPEC countries increased by 203,000 barrels daily to reach around 26.5 million barrels daily for the month according to data from secondary sources.
It stated, “OPEC-12 crude oil production in February increased by 203 tb/d, m-o-m, averaging 26.57 mb/d, as reported by available secondary sources.”
Despite commitments to oil production cuts going forward, Saudi Arabia increased its oil production for the month by around 55,000 barrels daily. It also continued its unchallenged position as the largest oil producer in the world with around 9.01 million barrels daily.
In the month under review, oil prices rose by around $1.19 or 1.5 percent to an average of $81.23/barrel according to OPEC’s reference basket. Brent crude went up by 3.2 percent to average around $81.72/barrel while NYMEX WTI futures contract rose by $2.75 to average $76.61/barrel.
The drop in crude oil production for February makes it the second consecutive month in the year that the country has failed to meet the target crude oil production benchmark in its 2024 budget and also its production quota as stipulated by OPEC. For 2024, Nigeria proposed a daily crude oil production of 1.78 million barrels while OPEC pegged its production at 1.5 million barrels daily.
Reduced crude oil production dents the Federal Government’s plan to raise revenues to execute its budget. It also negatively affects the ability of the CBN to increase FX liquidity to shore up the value of the naira.
Last week, President Bola Tinubu signed some executive orders geared towards making the Nigerian oil industry more attractive to investors. Chief among them was the executive order to reduce contract cycles to six months max and the provision of specific financial incentives for deep-water investments.
