Nigerian crude oil output grows by 9% to reach 2.09m barrels a day as militancy reduces

NIGERIA is on course to achieve its 2019 target of producing 2.3m barrels of crude oil a day after it emerged that output has risen by 9% to a high of 2.09m barrels following a drop in pipeline vandalism and repairs to the country's decaying infrastructure.

Traditionally, the Organisation of Petroleum Exporting Countries (Opec) has always given Nigeria a quota of 2.5m barrels a day but due to militancy in the Nigeria Delta, output has fallen way below this lately. In 2015, after Niger delta militants blew up four export terminals, oil installations and pipelines, production dropped to a low of 700,000 barrels a day.

Following the upsurge in militancy, President Muhammadu Buhari was forced to enter into an accommodation with the militants, agreeing to continue the amnesty programme in exchange for them, laying down their arms. Since then, production has grown steadily and the government has predicated the 2019 budget in the basis of 2.3m barrels of oil selling at a price of $60 a barrel.

Nigerian National Petroleum Corporation (NNPC) group managing director Dr Maikanti Baru said this rise represents a consistent year-on-year improvement. He singled out the Nigerian Petroleum Development Corporation (NPDC), the NNPC's upstream flagship company, as the major contributor to the industry’s success in 2018.

Dr Baru said the average production from NPDC’s operated assets alone grew from an average of 108,000 barrels per day in 2017 to 165,000 in 2018, describing the feat as the strongest production growth within the oil industry in recent times. He added that the NPDC’s equity production share, which stands at 172,000 barrels per day, represents about 8% of national daily production.

According to Dr Baru, about $1.7bn was saved with corporation’s joint venture partners over a five-year tenor repayment plan, adding that already, the corporation has defrayed $1.5bn of the arrears. Dr Baru promised that the NNPC would stick to the repayment agreement with the joint venture partners while transiting to self-funding modes.

He added that activities will resume in the Chad Basin as soon as there is a greenlight on the security situation in the area currently ravaged by the Boko Haram insurgency. In addition, Dr Baru flaunted the company’s sale of 1.2bn litres of petroleum products in 2018 as against 1.1bn litres in 2017, saying it represented a 7% increase.