November 29, 2024/CSL Research

Despite reports suggesting that Nigeria’s crude oil output, including condensates, rose to 1.8 million barrels per day (mbpd) in October 2024, official data from the National Upstream Petroleum Regulatory Commission (NUPRC) indicates otherwise. According to the NUPRC, crude oil production, including condensates, fell slightly by 0.40% in October, averaging 1.538 mbpd compared to 1.544 mbpd in September. However, when excluding condensates, crude oil production increased marginally by 9,029 barrels per day, rising from 1.32 mbpd in September to 1.33 mbpd in October.

Nigeria’s oil sector continues to grapple with significant challenges, including: widespread crude oil theft in the Niger Delta, aging oil fields and declining reservoir performance, poor infrastructure maintenance resulting in frequent shutdowns, and reduced upstream investment hampering capacity expansion and efficiency.

A detailed analysis of the October 2024 production data revealed a mixed performance across
the country’s oil terminals. The Forcados terminal experienced significant decline, with output plummeting by 30.15% to 5.09 million barrels, down from 7.29 million barrels in September. In contrast, other terminals showed improved performance.

The Escravos Terminal recorded a 5.19% increase in output, rising to 4.34 million barrels from 4.13 million barrels in September. The Qua Iboe Terminal reported a remarkable 45.06% increase, producing 4.14 million barrels compared to 2.85 million barrels the previous month. The Bonny Terminal also experienced growth, with output climbing by 2.62% to 6.26 million barrels, up from 6.10 million barrels. Similarly, the Brass Terminal posted a modest 0.66% month-on-month increase, reaching 1.05 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 1.52 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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