TUE, 30 AUG, 2022-theGBJournal| Unsurprisingly, the oil sector maintained its contraction for the ninth consecutive quarter in line with the lingering production challenges exacerbated by rising oil theft & vandalism, International Oil Companies (IOCs) divestments, given the challenging business environment and the shift to cleaner energy sources, and the lagging impact of age-long infrastructure decay.
Accordingly, the oil sector contracted by 11.77% y/y in Q2-22 (Q1-22: 26.04% y/y) as crude oil production (including condensates) settled at 1.43mb/d (Q1-22: 1.49mb/d).
Notably, we highlight that crude oil production decline was significant across the Bonny (-74.9% y/y), Brass (-26.3% y/y), Qua Iboe (-19.2% y/y), Egina (-13.1% y/y) and Forcados (-10.1% y/y) production terminals/streams. The highlighted production terminals contributed 40.6% to crude oil production in Q2-22.
Therefore, and as observed in the past few quarters, we do not expect the country’s crude oil production to breach the OPEC+ quota (1.83mb/d as of August), given the nature of the challenges hampering output.
Accordingly, we expect crude oil production to settle at 1.35 mb/d. If we factor in condensates, we expect crude oil production to print 1.46 mb/d, translating to a negative growth estimate of 7.01% y/y.
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