By Oladimeji Abidoye
FRI, 9 SEPTEMBER 2016-Nigeria’s oil production levels could reach the 2 million barrels per day level by the end of the fourth quarter (Q4-2016), a source with knowledge of developments in the sector told G&BJournal. He said he expects to see more capital spending deployed in the development of deep water projects as confidence grows on the federal government’s determination to respect commercial contracts and provide security in the Niger Delta.
Production crept up to 1.44 million barrels a day in August amidst ongoing negotiations with the Niger Delta militant group, the Avengers. The group has since declared an end to attacks on Nigeria’s oil infrastructure, reinforcing hope of an accelerated production activity.
Our source says discussions are strong on the table to complete the development of the eight deepwater projects, due in 2020. The projects include the Bonga South West development which was earlier deferred by Shell and has a potential to deliver additional 1 million barrels a day of output.
Meanwhile, the Organisation of Petroleum Exporting Countries are debating production freeze to shore up prices while Saudi Arabia and Iran are said to be yielding ground on the tough stand against production cap.
Sources at OPEC said Saudi Arabia dropped production by almost 40,000 barrels per day to bring output levels to just about 10.67 million barrels in July. Russia is also back on the table to revive effort at shoring up price after it joined Saudi Arabia and other OPEC members on a production rush to counter US growing shale oil production surge.
Nigeria will be mostly attentive to discussions around oil price since the country’s production level is currently well below allocated level, our source said.
Production plummeted to about 600,000 barrels a day by May 2016, not only on the activities of the militants in drilling areas but also amid huge industrial-scale theft and vandalisation by organised oil thieves.
