December 16, 2024/CSL Research

According to the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), crude oil production, including condensates, increased by 10% in November to 1.69 million barrels per day (mbpd), up from 1.54 mbpd in October, its highest level since March 2021. Excluding condensates, crude oil production also saw a substantial increase of 152,334 barrels per day, rising from 1.33 mbpd in October to 1.49 mbpd in November. Despite this improvement, Nigeria’s oil sector continues to face 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 investments hampering capacity expansion and efficiency.

Further analysis of the November 2024 production data showed variations across terminals. The Forcados terminal recorded a significant surge in output, increasing by 65.8% to 8.44 million barrels, up from 5.09 million barrels in October. The Bonny Terminal also saw strong growth, with production rising by 20.6% to 7.55 million barrels, compared to 6.26 million barrels in the previous month while the Bonga Terminal posted a modest increase of 5.6%, reaching 4.06 million barrels. In contrast, some terminals reported slight declines.

The Escravos Terminal experienced a 6.1% drop in output, producing 4.07 million barrels, down from 4.34 million barrels in October. The Odudu Terminal recorded a marginal decrease of 4.1%, with production falling to 2.43 million barrels from 2.53 million barrels the previous month.

Nigeria’s persistently low oil production levels have resulted in significant revenue losses and a sharp decline in foreign exchange (FX) supply, as crude oil sales remain the country’s primary source of FX. Efforts to increase output have fallen short of meeting both OPEC production quotas and the demands of local refineries. In 2024, crude oil production has averaged approximately 1.54 million barrels per day (mbpd), well below the government’s budget target of 1.78 mbpd, raising concerns about the feasibility of achieving this goal.

However, the robust production growth recorded in November provides a glimmer of hope. If this upward trend continues, the average production for the year could align with our forecast of 1.56 mbpd.

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