TUE, 27 SEPT, 2022-theGBJournal| According to the recently released data by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria’s crude oil production (including condensates) declined by 10.4% m/m to 1.18mb/d in August (July: 1.31mb/d).
The persistent low crude oil production volume reflects the passthrough impact of infrastructure decay, massive theft and vandalism, and IOC divestments, given the challenging business environment amid the move to cleaner energy sources.
Notably, crude oil production declined across the Qua Iboe (-0.4% m/m), Egina (-10.1% m/m), and Agbami (-1.8% m/m) production terminals, while the Escravos (+14.1% m/m) and Odudu (+2.8% m/m) production terminals recorded increased output.
The consistent low crude oil production volume suggests that the oil GDP could drag overall growth in 2022FY amid the continued resilience of the non-oil sector.
Overall, we do not expect a significant improvement in crude oil production over the short term, given the nature of challenges hampering production. Despite the rally in crude oil prices, we expect the government’s oil revenue performance to remain underwhelming over the short term.
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