September 24, 2024/CSL Research
Data from the National Upstream Petroleum Regulatory Commission (NUPRC) indicates that Nigeria’s crude oil production, including condensates, rose by 2.41% month-on-month in August 2024, reaching 1.57 million barrels per day (mbpd), up from 1.53 mbpd in July 2024.
Excluding condensates, production increased to 1.35 mbpd from 1.31 mbpd, representing an
increase of 45,032 barrels per day. While this recent growth is notable, Nigeria’s oil output has
struggled in recent years, hitting a low of 0.94 mbpd in September 2022. The key factors behind these low production levels include widespread crude oil theft in the Niger Delta, aging oil fields, poor maintenance of crude oil terminals leading to frequent shutdowns, and a decline in investments in the upstream oil and gas sector.
Further analysis of the data revealed mixed performance across different terminals in August
2024. The Bonny Terminal recorded a 6.41% increase, producing 5.48 million barrels compared to 5.15 million barrels in July. The Forcados Terminal saw a more significant boost, with production climbing by 16.03% to 9.01 million barrels, up from 7.76 million barrels.
On the other hand, the Escravos Terminal experienced a 4.41% decline, producing 4.27 million
barrels in August compared to 4.47 million barrels in July. The Brass Terminal posted an 8.16%
month-on-month increase to 879,737 barrels, while production at the Qua Iboe Terminal decreased by 7.98%, producing 3.09 million barrels in August.
Nigeria’s low oil production levels have led to significant revenue losses and a sharp decline in foreign exchange (FX) supply, as crude oil sales remain a crucial source of FX for the country. In response, the Nigerian National Petroleum Company Limited (NNPCL) has ramped up efforts to combat crude oil theft and vandalism, emphasizing the importance of protecting oil production as a matter of national security.
However, despite these efforts, achieving the 2024 budget target of 1.78 million barrels per day (mbpd) remains challenging due to ongoing security and operational issues. Consequently, we maintain our forecast for oil production to reach 1.56 mbpd in 2024, with an expected average of 1.60 mbpd in the second half of the year.