Nigeria oil output rises to 1.8 million b/d on security measures: NNPC

Nigeria's oil and gas production has risen sharply to hit 1.81 million b/d thanks in part to an ongoing blitz on oil thieves and saboteurs, the head of state-run Nigerian National Petroleum Company claimed on Nov. 14.

According to the latest S&P Global Commodity Insights estimates, Africa's largest oil producer has pumped at an average of 1.5 million b/d so far this year, having seen crude output fall below its estimated 2.2 million b/d capacity due to theft, underinvestment and technical issues at ageing fields.

However, Mele Kyari, the NNPC boss, told journalists that Nigeria and its foreign partners had "revved up crude oil and gas production to 1.8 million b/d and 7.4 Bcf/d," thanks to efforts by the government, security agencies and joint venture oil partners to tackle pilfering and sabotage.

"The interventions that led to the recovery of production cut across every segment of the production chain with security agencies closely monitoring the pipelines," Kyari said. Nigerian lawmakers estimated daily crude theft at some 400,000 b/d earlier this year.

Kyari said output rose from 1.43 million b/d in June to 1.7 million b/d in August and 1.808 million b/d in November, adding that the country is now targeting 2 million b/d by the end of 2024. It was not clear which fields or projects had driven the apparent production boost.

The figures are significantly higher than the official numbers released by the Nigerian upstream petroleum regulator and the Platts OPEC Survey from Commodity Insights, which assessed October output excluding condensate at 1.32 million b/d and 1.44 million b/d respectively.

"If these numbers reflect the reality on the ground, it offers some breathing room to the federal government: 1.8mn is above the level for which the [Bola] Tinubu administration budgeted, after months below that threshold," said Clementine Wallop, director for sub-Saharan Africa at Horizon Engage. "However, market participants have reason to be cautious after overly rosy production forecasts from the ministry and NNPC in recent months."

Wallop noted that the update followed an organizational shakeup at the NNPC, which is widely seen as a microcosm for the competition for control of Nigeria's lifeblood oil revenue.

"It is interesting that this news comes the day after NNPC's upstream chief, Oritsemeyiwa Eyesan, departed from the firm," Wallop said. "Eyes will be on her successor, Udobong Ntia, as NNPC works to maintain the upward trend."

State of emergency

Nigeria has consistently struggled to produce up to its maximum capacity in recent years and in January saw its OPEC quota lowered by some 200,000 b/d after months of underproduction -- a symbol of declining African influence within the bloc.

In the past year, the country has seen an attempted exodus from its onshore and shallow water by IOCs including ExxonMobil and Shell, which have sought to sell assets to local firms.

President Tinubu, who campaigned on a promise to reform the country's oil sector, declared a state of emergency in the industry in June, directing security agencies to go after thieves and vandals in the Niger Delta.

"These measures have directly improved the uptime of the Trans Niger Pipeline in the eastern Niger Delta, and today, all operating companies along the TNP can produce into this major trunkline," Presidential Adviser on Energy Olu Verheijen said Nov. 14 at an industry event.

The oil sector reforms included an improved fiscal framework for producers, she added, including in the deepwater, and were set to attract new investments that would unlock around 1.3 billion barrels of oil equivalent in oil and gas resources.