Group managing director of the Nigeria National Petroleum Company (NNPC), Mr. Mele Kyari, has said that Nigeria’s inability to meet the Organisation of Petroleum Exporting Countries (OPEC) production quota is due to the raging, menacing oil theft in the country.
Last Monday, OPEC announced that for the fourth time in 2022, Nigeria missed its crude oil production allocation. The cartel said so in its report for the month of April.
The report said, among others, that Nigeria produced 1.39 million barrels per day as against the expected 1.735 mb/d. This means that Nigeria’s oil production plunged by 40,000 barrels per day, translating to 1.2 mb/d during the period.
Nigeria missed its oil production target for January after pumping 1.399 mb/d against the 1.683 mb/d approved by OPEC. The country produced 1.258mb/d and 1.238 mb/d in February and March respectively.
Reuters said Brent crude oil prices, the benchmark for Nigeria’s oil, closed on average in April at $101 per barrel. The 1.2 mb/d production shortfall comes to a total of $121.2 million (N49.9bn) oil revenue loss.
Reacting to the development yesterday, Mr. Kyari said Nigeria is very much capable of repeating the post Covid19 record when it hit its highest production level of 2.49mbpd on 17th April, 2020.
Year 2020 was the year Covid-19 almost brought the world to a halt with virtually every country on lockdown. This saw the price of crude oil crashing to sub-zero levels with unprecedented demand dip. Observers said this development resulted in zero crude oil theft in Nigeria.
“During Covid19, obviously because the there was no market for the thieves to sell their stolen crude. This saw the country recording its highest production level of 2.49mbpd on 17th April, 2020.
According to Mallam Kyari, what the oil zero theft development was because there was no market for the thieves to sell their loot.
“As normalcy began to return and the price of oil began to experience a steady rise, the oil thieves began to step up their game and upstream operators began to experience production losses, which have been growing since in almost direct proportion to the rise in crude oil price in the international market,” the NNPC boss stated.
Explaining the situation, the NNPC GMD said it got to a point where, if, say, 239,000 barrels of crude oil was injected into either of the Trans-Niger Pipeline or the Nembe Creek Trunk Line (these are some of the major pipelines that convey crude oil to the terminals for export), one will only receive 3,000 barrels.
“It got to a point where it was no longer economically sustainable to pump crude into the lines and a force majeure was declared,” Kyari stated.