TheCable

Nigeria’s oil production increased marginally in September to an average of 1.25 million barrels per day from 1.24 million the previous month.

The latest data from the Department of Petroleum Resources (DPR) on the 2021 crude oil and condensate production report has shown.

According to the report, the increase represented 0.8 percent from the August production figure — but still among the lowest since January 2021.

The production output is in contrast with the Reuters survey that oil output rose by 170,000 barrels per day (bpd) in September 2021.

By implication, the development would continue to affect the nation’s crude exports and foreign earnings. 

On Monday, vice-president Yemi Osinbajo said the country’s low oil production affected earnings and revenue for the government as projected in the 2021 budget.

Speaking at the midterm retreat of President Muhammadu Buhari’s second term, Osinbajo said the various shutdowns in some of the wells contributed to low production and impacted revenue.

“Revenue, of course, improved despite oil production issues. Although much lower than projected revenue in the budget due to problems in oil production,” Osinbajo said.

“We are producing less than our OPEC quota.

“Shutdowns or shut-in in some of the wells, and the various problems of getting them back up have generally tended to reduce our oil revenue as you see in the GDP report.”

Last week, the Organisation of Petroleum Exporting Countries (OPEC) and its allies agreed to maintain its gradual monthly oil production increase.

But Nigeria has been performing below the OPEC quota — from an average of 1.36 million barrels per day in January 2021 to 1.25 million b/d in September.

According to the S&P Global Platts survey, Nigeria’s low oil production was caused by damages along key crude grades.

The Forcados is in its third-month force majeure while Nembe Creek Trunk Line severely impaired exports of Bonny Light.

In August, Shell Petroleum Development Company (SPDC) declared force majeure on Forcados crude oil — one of Nigeria’s main crude oil terminals, exporting an average of 240,000 barrels of crude oil daily.

Data from DPR showed that crude oil production at Forcados terminal is recovering, rising from 2 million barrels in August to 4.7 million in September.

On the flip side, Bonny Light slumped from 5.1 million barrels in August to 3.3 million in September. The two terminals are doing below 6 million barrels as of January 2021.

On Tuesday, Brent crude oil futures, global oil benchmark, rose 0.17 percent to $83.82 a barrel, while U.S. West Texas Intermediate (WTI) crude oil futures increased 0.08  percent to $80.60 a barrel.