Reversing the gains recorded in June, Nigeria’s total oil production dropped by 12.56% month-on-month (M-o-M) from 1.48 million barrels per day (mb/d) in June to 1.29 mb/d in July 2023. The July oil output figure includes 1.08 mb/d of crude oil and roughly 213,000 barrels of blended and unblended condensates daily. The output figure is sizably lower than the budgeted 1.69 mb/d for 2023 and the 1.74 mb/d for Nigeria as production required (quota) OPEC. Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) fingered the production shortfall of the Forcados terminal as a significant cause of the output decline. The brief shutdown of the facility due to a leak reduced its total production figure from 7.89 million barrels (mb) in June to a lower 3.28 mb in July. Despite the heightened production of the Escravos oil terminal and the Qua Iboe terminal, the declines in the total production figures of other major terminals like the Bonny terminal, Brass terminal, and Odudu terminal further drove down the cumulative oil production figures for the month.
Analysts have also attributed the decline in oil output to deteriorating oil production facilities, slower oil rig growth, and persistent oil theft in the Niger Delta region. This was stated in a recent Nigerian National Petroleum Company Limited (NNPCL) report showing 240 cases of oil theft, vandalism, and illegal refining within a week in July, further indicating the enormity of the problem and the continued fall in oil exports. Analysts believe raising the country’s oil output to meet its 1.74 mb/d quota is one of the low-hanging fruits to raise the country’s foreign reserves and defend the naira against major currencies. It is believed this could be done through concerted efforts of all stakeholders to reduce oil theft, revive dormant wells and attract fresh investment into the sector (see chart 2 below).
