Nigeria’s Oil Production Slips for the Third Consecutive Month

0
493

Yesterday, Organisation of Petroleum Exporting Countries (OPEC) released its monthly oil market report for December which showed that Nigeria’s oil production dipped to a new low extending 3 months of consecutive decline. Specifically, Nigeria’s daily crude production (excluding condensates) for December 2019 fell to 1.57mb/d from 1.66mb/d in November 2019.

Furthermore, Nigeria’s average daily production (excluding condensates) in 2019 came to 1.73mb/d. Adding condensates production which the Department of Petroleum Resources (DPR) pegged at between 414,000 – 497,000 b/d (IEA estimates 220,000 – 250,000 b/d) brings total average production in 2019 to roughly 2.2mb/d in line with Mele Kyari’s declaration at the Atlantic Council Global Energy Forum.

Nigeria’s oil production quota was previously placed at 1.69mb/d which was not complied with. However, following consultations with the cartel in October 2019, the production quota was lifted to 1.77mb/d.

In recent times however, the country’s production has been below quota. NNPC boss, Mele Kyari has since declared the country is directing its upstream efforts at improving natural gas liquids and natural gas to better comply with OPEC’s quota since OPEC’s quota excludes production of NGLs

We think Nigeria’s decision to comply with its OPEC+ quota bodes positively for the global oil market without necessarily hurting local targets.

The 2020 budget assumption of 2.18mbd oil production now looks achievable provided condensates production in line with DPR estimates can be maintained.

However, concern remains how Nigeria can exploit its rich deposits of NGLs given dearth of adequate technological infrastructure.

SHARE
Previous articleIslamic finance will help deepen financial inclusion in Nigeria’s Northern regions
Next articleAfrican economies must support Indigenous entrepreneurs to curb unemployment
Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.