Nigeria's Oil Production Down by 82,644bd in January

Nigeria produced less oil in January 2019 that it did in December 2018 by 82,644 barrels per day (bd), current production records obtained from the Ministry of Petroleum Resources on Monday disclosed.

According to the ministry in its monthly ‘Petroleum Periscope’, Nigeria’s oil production level in December 2018 was 2,081,936bd, which was reduced to 1,999,292bd in January, indicating a difference of 82,644bd. Both production volumes included condensates.

Although the ministry did not give reasons for the reduction in production, it was however gathered that it may not be separate from the country’s commitment to the voluntary production cuts agreement member countries of the Organisation of Petroleum Exporting Countries (OPEC) reached with non-OPEC countries led by the Russian Federation in December 2018, to modulate oil price which was unsteady as a result of oil demands and supplies levels. The agreement had been planned to become effective from January this year.

Also, in its November 2018 operations and financial report which was recently published, the Nigerian National Petroleum Corporation (NNPC) stated that Nigeria produced a total of 62.27 million barrels (mb) of crude oil and condensate in October 2018, representing an average daily production of 2.01 million barrels (mb).

It further explained the production volume was 2.63 per cent more than the average daily oil production in September 2018.
According to the NNPC, oil production in the month was also cut back by shutdown of Bonny export terminal and Trans Ramos Pipeline (TRP) due to leakages at the Patrick waterside and Odimodi areas respectively. Production was also disrupted at Agbami; Brass; Okpo; Qua Iboe, OYO, Tulia and ERHA terminals due to flooding, technical issues, maintenance and leakages.

Recently, it was gathered from a document containing the production adjustment commitments made by OPECmember countries that Nigeria would voluntarily stop 53,000bd of her crude oil without condensate from getting to the international market as part of the agreement reached at the December 2018 - 175th meeting of the OPEC Conference and fifth OPEC and non-OPEC ministerial meeting in Vienna.

In the document, which OPEC posted on its webpage, Nigeria declared its reference oil production level to be 1.738mbd out of which 53,000bd would be deducted, and 1.685mbd allowed into the market.
The country, it was also learnt, would be the largest African producer in terms of volumes to contribute to the production cut agreement considering that Angola which declared a reference production volume of 1.528mbd will contribute 47,000bd to the agreement while Algeria with 1.057mbd production level will contribute 32,000bd. 

Other African producers like Congo; Equatorial Guinea; Gabon; South Sudan and Sudan will contribute 10,000bd; 4,000bd; 6,000bd; 3,000bd; and 2,000bd respectively. Libya, is exempted from the agreement on account of geo-political issues.
Collectively, the document stated that OPEC member countries will take out 812,000bd of oil while 10 non-OPECcountries will take out 383,000bd to bring the expected volume of oil to be taken out of the market effective from January 2019 to 1.195mbd.

Again, in December 2018, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, told the media that Nigeria could not be said to be comfortable with its current oil production levels, but did not ask to be exempted from the cut.