An analysis of industry data has revealed that Nigeria’s crude oil production was less by 263 million barrels. This under-production is a result of the 2022 federal budget which projected the production of 1.88 million barrels of crude oil per day. Aside under-production, the inability of the country to deliver the $20 billion and $9.8 billion Brass and Olokola LNG projects after almost two decades of initiation has caused the country to count its losses from failed projects, notwithstanding the lucrativeness of gas presently.
Economic losses which arose from the pending projects – according to sources and data from industry – include huge revenue and job losses, delayed industrialization, flight of Foreign Direct Investments (FDIs) to surrounding countries and increasing energy poverty in the country. Also, gas is now a global sought-after energy source encouraged by the Russia-Ukraine War and the acceptance of gas as the transition fuel. However, the failed execution of the Brass and Olokola LNG projects have counted Nigeria out of the countries profiting from their LNG revenues.
Many crude oil producers suffered major losses in 2022.
The Senate and House of Representatives, in the last quarter of 2021, fixed the expected daily output of the country for 2022 at 1.88 million barrels of crude oil per day at the rate of $57 per barrel. When calculated, the total expected production from January to November should be 641 million barrels, however, an estimation by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) revealed that the realization in the first eleven months of 2022 – the period under review – is only 378 million barrels.
According to NUPRC data, the report further showed that the Bonny terminal production declined from 3.8 million barrels in January to 1.5 million barrels in November. Also, Brass’ output declined from 1.36 million barrels in January to 404,726 barrels in November as well as Qua Iboe which produced 5.3 million barrels in January but reduced to producing 4.4 million barrels in November. Likewise, Forcados’ output which was 7.5 million in January reduced to 6.2 million last month. Escravos’ output, on the contrary, is the only one which increased from 3.7 million barrels in January to 4.6 million barrels in November.
In October, Nigeria drilled 1.024 million barrels of oil per day.
Regardless of the reduced production of crude oil, Nigeria has risen to the top as the highest oil producer in Africa due to improvement in its November OPEC production performance. In previous months, Nigeria took the fourth position while Angola, Algeria and Libya v the leist. During this period, Nigeria struggled with sundry issues which hindered its ability to meet the OPEC oil quota. In October, while Algeria, Angola and Libya drilled 1.060 million barrels, 1.051 million barrels and 1.163 million barrels per day, respectively, Nigeria drilled 1.024 million barrels per day.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, asserted that the country is trying its best to meet its OPEC crude oil production quota of 1.8 million barrels per day by the end of May, 2023. The minister further explained that the federal government would continually aid the improvement of security by the tracks of the major crude oil pipelines and seal every leakage through which oil thieves and pipeline vandals steal crude oil.
Lack of political will contributed to the failed LNG projects.
According to Ginnah, who spoke at a recent capability building workshop for media stakeholders in Lagos, lack of political will by successive administrations has massively contributed to the inability to successfully execute the projects. He lamented on Nigeria’s inability to benefit from the global demand for gas and accompanying opportunities for revenue growth because it was unable to deliver two essential LNG projects that will ensure the pumping of more gas to the market.
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