October 15, 2024/CSL Research
According to data from the National Upstream Petroleum Regulatory Commission (NUPRC), Nigeria’s crude oil production, including condensates, fell by 1.68% in September 2024, averaging 1.54 million barrels per day (mbpd), down from 1.57 mbpd in August 2024. Excluding condensates, production dropped to 1.32 mbpd from 1.35 mbpd, a decline of 27,396 barrels per day. Nigeria’s oil output has been facing challenges in recent years, including widespread crude oil theft in the Niger Delta, aging oil fields, poor maintenance of oil terminals leading to frequent shutdowns, and declining investments in the upstream oil and gas sector.
A detailed analysis of the September 2024 oil production data showed a mixed performance across various terminals. The Forcados Terminal was the main contributor to the overall decline in crude oil output, with production plunging by 80.97% to 7.29 million barrels, down from 9.01 million barrels in August. The Escravos Terminal also saw a slight reduction, with output falling by 3.46% to 4.13 million barrels, compared to 4.27 million barrels the previous month while the Qua Iboe Terminal experienced a 7.80% decline, producing 3.09 million barrels, down from its August total. On a positive note, the Bonny Terminal reported an 11.34% increase in production, rising to 6.10 million barrels from 5.48 million barrels in August. Similarly, the Brass Terminal saw a significant month-on-month boost of 18.77%, reaching 1.04 million barrels.
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 primary source of FX for the economy. The country has struggled to increase output to meet both its OPEC production quota and the needs of local refineries. So far in 2024, crude oil production has averaged around 1.50 million barrels per day (mbpd), raising doubts about the government’s ability to meet the 2024 budget target of 1.78 mbpd, as well as our forecast of 1.56 mbpd for the year.
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