The Chief Upstream Investment Officer, NNPC Upstream Investment Management Services, Bala Wunti, said last week that Nigeria’s production capacity has increased to 1.6 million barrels per day (bpd) from the 937,000-bpd reported back in September. This is as Nigeria, Africa’s former top oil producer, has consistently failed to meet OPEC’s production quota of 1.830 million bpd.
What they are saying
The NNPC official attributed the recent progress made in the country’s oil sector to an intensification of government efforts against oil theft through the collaboration of security agencies in Nigeria.
Nigeria by the recent surge in production capacity has indicated that the country can reach and surpass OPEC’s production quota of 1.830 million bpd. But what is the next high? Can the country hit the 2.5 million bpd mark, its supposed production capacity? Here are a few factors that suggest so.
Oil discovery in the north
President Muhammadu Buhari flagged off a crude oil production in Kolmani, a borderline area between Bauchi and Gombe states. According to reports, the oil discovery in Kolmani has over 1 billion barrels of oil reserves and 500 billion cubic feet of gas. And there is potential for more. Furthermore, reports have projected the oil field to produce about 50,000 barrels per day for a start. This would definitely raise the country’s total production capacity going forward.
Reopening shut oil pipelines
The federal government of Nigeria shut down three crude oil export terminals with a combined capacity of 580,000 barrels per day. The affected terminals including Bonny, Brass, and Forcados, recorded production cuts of 79%, 40.5%, and 96.5%. Officials say the federal government shut down the pipelines to stop the escalation of vandalism of crude oil pipelines. However, the federal government is finalizing plans to re-open these streams.
Suppressing oil theft in Nigeria
A disturbing reoccurrence of oil theft plagues Nigeria’s oil industry can be traced to several decades ago. In October, the country was abuzz when it uncovered an unauthorised 4 km pipeline syphoning crude oil from the Trans-Forcados pipeline for over 9 years. At the time of this report, they have discovered over 58 illegal crude oil extraction sites in Delta and Bayelsa states. Industry data states that Nigeria loses 600,000 barrels per day to this menace. But with the federal government’s intensified efforts to combat this issue, Nigeria could be on the way to reaching its potential.