December 12, 2022/CSL Research
Following the reopening of the Forcados crude oil pipeline by Shell Petroleum Development Company in October and the recent clampdown on illegal pipeline connections at various locations, the nation’s crude oil production volume improved further by 16.87% month-on[1]month to 1.19mbpd (1.41mbpd with condensates) from 1.01mbpd (1.23mbpd with condensate) recorded in October 2022. Based on data from the National Upstream Petroleum Regulatory Commission (NUPRC), the increase in volume was largely driven by increases in the production volumes from both the Forcados and Ugo Ocha (Jones Creek) oil fields.
At the Forcados terminal, average daily production volume increased to 0.209mbpd (0.229mbpd with condensates) in November 2022 from 0.076mbpd (0.084mbpd with condensate) recorded in October 2022. At the Jones Creek, total production volume increased month-on-month to 619,431 barrels in November from 22,277 barrels recorded in October 2022. However, production at Bonny terminal reduced slightly month-on-month to 0.051mbpd (0.062mbpd with condensates) in November 2022 from 0.052mbpd (0.06mbpd with condensates) recorded in October 2022.
As earlier noted, crude oil production maintained a steady decline from 1.4mbpd in January, to 1.26mbpd in February, to 1.24mbpd in March, to 1.22mbpd in April and to 1.02mbpd in May 2022. There was a transient recovery in June to 1.16mbpd but production declined again to 1.08mbpd in July, 0.97mbpd in August and 0.94mbpd in September. At 1.6mbpd budgeted for 2022, the total expected volume from January to November was 534.4 million barrels while the actual volume produced was 378.91 million barrels.
Consequently, as of 30 November 2022, there was a cumulative (January to November) shortfall of 155.49 million barrels amounting to a gross revenue shortfall of US$11.35bn at US$73 per barrel budget benchmark. We remain hopeful that the Federal Government will sustain its reinforced pipeline surveillance and clampdown on oil theft, hence, we expect further improvement in the crude oil production volumes. By extension, we anticipate some respite in the fiscal space amid relative stability of the international crude oil price
