SAT, 29 OCT, 2022-theGBJournal| At a press briefing on 24 October, the CEO of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) stated that current statistics showed that the volume of oil lost to theft in Nigeria is about 100.00kb/d, translating to an estimated 3.00mb per month.
However, asides from the massive theft and pipeline vandalism, we note that the current crude oil production challenges are also driven by an age-long infrastructure deficit and International Oil Companies (IOCs) divestments, specifically from onshore assets amid challenging operating environments.
Accordingly, the preceding suggests that the attention placed on theft and pipeline vandalism alone as a solution to the lingering production challenges might have been overblown by the government.
We note that Shell Petroleum Development Company Limited (SPDC) resumed crude oil exports at the Forcados oil terminal on 20 October after about three months of shutdown for essential repairs.
We estimate this could add an average of 225.80kb/d to Nigeria’s crude oil production based on the terminal’s H1-22 production numbers. However, without significant improvement to infrastructure and proper training of indigenous firms to handle the divested IOC’s assets, we believe that Nigeria will be unable to meet its pre-COVID production high (c. 2.10mb/d).-Analysis with Cordros Research
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