Concerns As Nigeria’s Oil Production Plummet Again

According to the Organisation of Petroleum Exporting Countries (OPEC), Nigeria’s crude oil production declined for the second consecutive month in March.

The country’s daily output dropped to 1.231 million barrels, as reported in OPEC’s Monthly Oil Market Report for April 2024.

Naija News understands that the report highlights that Nigeria communicated directly with OPEC, revealing that the oil production in March was lower than that of February.

According to the report, Nigeria’s crude oil production was recorded at 1.322 million barrels per day in February of this year, but it decreased to 1.231mbpd in March, marking a decline of 91mbpd.

The report also mentioned that the country had produced 1.427mbpd of crude in January, but this level was not maintained in February as production dropped, and the downward trend continued into March.

On the other hand, OPEC data revealed that Nigeria’s average crude oil production in the first quarter of 2024 stood at 1.327mbpd, which was higher than the average production of 1.313mbpd in the fourth quarter of 2023.

In the third quarter of last year, Nigeria’s average oil production was 1.201mbpd, but in 2024, the first quarter output surpassed this figure.

However, Nigeria has been facing challenges in its oil production due to oil theft and pipeline vandalism. These issues have caused a decline in the country’s output, falling below the volume approved for Nigeria by OPEC.

Reports had revealed earlier that the Nigerian National Petroleum Company Limited recorded 155 incidents of oil theft in just one week.

During the review period, 53 illegal pipeline connections and 36 illegal refineries were discovered in the Niger Delta.

“Between March 30 and April 5, 2024, a total of 155 incidents were recorded across several locations in the Niger Delta region from various incident sources,” The PUNCH quoted the firm to have stated in a report earlier.

In a report detailing the events, NNPCL announced that it documented 53 unauthorized connections, found 36 illicit refineries and 32 wooden fibre boats, pinpointed 14 instances of pipeline sabotage, eight violations involving vessels, and four oil leaks. Additionally, seven vehicles and one vessel were apprehended.

The Nigeria Agip Oil Company, Tantita Security Services Ltd, NNPCL Command and Control Centre, Shell Petroleum Development Company, and NNPCL 18 Operating Ltd were among the sources of these incidents.

The company provided additional details: “In the past week, 32 wooden boats conveying stolen crude and illegally refined products were seized and confiscated in Rivers and Delta states.

“On land, seven vehicles loaded with stolen crude were arrested in Imo, Delta and Rivers states. 53 illegal connections were uncovered between March 30 and April 5, 2024, in Bayelsa, Rivers and Delta states.

“14 cases of vandalism were also recorded in Rivers, Bayelsa and Delta states, while illegal storage sites where stolen crude and illegally refined products are kept were uncovered in Akwa Ibom, Bayelsa, Rivers and Delta states.”

The national oil company reported the presence of illegal refineries in Abia State, noting that the activities of oil thieves had caused significant damage to the affected environments in the state.

It was revealed that a total of 36 clusters of these illegal refineries were found in various locations in Rivers and Abia states over the past week.

“Four cases of oil spills due to vandalism activities were recorded in the past week,” NNPCL stated, adding that in Rivers State, oil leaks from a wellhead are destroying aquatic life.

Nigeria Losing Trillions Of Naira To Crude Oil Theft

Naija News understands that Nigeria has suffered significant financial losses due to crude oil theft, leading to some international oil companies shifting their focus from onshore to deep offshore oil fields, or even leaving the country altogether.

Recently, the NNPC reported that 38 individuals were apprehended during the previous week, emphasizing that the national oil corporation will continue to combat crude oil theft until it is completely eradicated.

For example, in November 2023, The PUNCH disclosed that the Federal Government disclosed over N4.3tn worth of crude oil was stolen in 7,143 pipeline vandalism incidents over a span of five years.

The government made the announcement during the Nigeria International Pipeline Technology and Security Conference in Abuja, themed ‘Bolstering Regulations, Technology and Security for Growth.’ The event was hosted by the Pipeline Professionals Association of Nigeria.

During a session at the conference led by the Nigeria Extractive Industries Transparency Initiative, a Federal Government agency, it was disclosed that oil theft and losses in Nigeria had reached a critical level, being classified as a national emergency.

The Executive Secretary of NEITI, Ogbonnaya Orji, stressed that oil theft was a pressing issue that posed a significant threat to oil exploration and exploitation. It had detrimental impacts on economic growth, business opportunities, and profits for oil companies.

Providing data from the agency’s reports to back his claims, he said, “NEITI disclosed that in the last five years, 2017 to 2021, Nigeria recorded 7,143 cases of pipeline breakages and deliberate vandalism resulting in crude theft and product losses of 208.639 million barrels valued at $12.74m or N4.325tn.

“NEITI reports also disclosed that during the same period, Nigeria spent N471.493bn to either repair or maintain pipelines.”