WED. 15 FEB, 2023-theGBJournal| According to the Nigerian Upstream Regulatory Commission (NUPRC), aggregate crude oil production (including condensates) increased by 5.7% m/m to 1.49mb/d in January (December 2022: 1.41mb/d), reflecting the impact of the government’s recent efforts to curb crude oil theft and vandalism.
The breakdown provided showed that crude oil production increased across the Forcados (+5.4% m/m), Escravos (+5.3% m/m), Bonga (+9.3% m/m), and Agbami (+160.8% m/m) oil terminals.
However, production volume remains significantly below the country’s OPEC+ production quota (1.83mb/d), likely reflecting the impact of other factors hindering higher crude oil production asides from oil thefts and vandalism.
The notable factors include an age-long infrastructure deficit and divestments by large International Oil Companies (IOCs).
Although crude oil production is expected to increase in 2023E (Cordros estimate: 1.53mb/d vs FGN’s estimate: 1.69mb/d), it is unlikely to reach the pre-pandemic level (c. 2.10mb/d) in the absence of incentivising investment in new production capacity and proper handover of divested IOC’s assets to indigenous companies.
Analysts say given this scenario, government’s oil revenue performance will remain underwhelming over the short term.
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