Recently, there has been some positive news for Nigeria’s oil industry. Daily oil production increased slightly in June, up by 25,000 barrels from May. This comes after a steady decline in production throughout the year so far. The Nigerian National Petroleum Company (NNPC) had previously described the situation as critical. According to a report by the Organization of the Petroleum Exporting Countries (OPEC), Nigeria’s June production was 1.276 million barrels per day (mbpd). This is an improvement from May’s 1.25 mbpd, although some OPEC sources reported a small drop from 1.37 in May to 1.36 mbpd in June.
Earlier in the year, Nigeria’s oil production had seen significant fluctuations. In April, production was at 1.28 million daily, which dropped to 1.25 mbpd in May. This downward trend had been observed from the beginning of the year, with production falling from 1.427 in January to 1.322 mbpd in February. The decline continued in March, with production dropping from 1.32 in February to 1.23 mbpd in March. Mele Kyari, the Group Chief Executive Officer of NNPC, mentioned that crude production was nearing 1.7 mbpd in May. He recalled a time during the COVID-19 pandemic when production unexpectedly surged to 2.2 mbpd due to decreased activities from thieves and vandals.
State of emergency declared on oil production.
The continuous decline in oil production raised concerns among government officials and industry leaders about Revenue losses and the government’s inability to boost production. In response, the NNPC declared oil production a state of emergency, committing to tackling the challenges head-on. The NNPC’s head stated that they are ready to address the issues with the right tools and collaboration with partners to improve the situation. This determination to combat the problems affecting oil production shows the importance of the oil sector to Nigeria’s Economy and the urgent need to stabilize and increase production levels.
In 2014, Nigeria’s oil production averaged around 2.2 million barrels per day at the beginning of the year. However, this figure faced major disruptions due to militant activities in the Niger Delta region. Production dropped to 1.7 mbpd by mid-year as a result. The government’s efforts to negotiate Peace with militants and secure oil Infrastructure helped stabilize production towards the end of the year, averaging around 2 mbpd. In 2015, Nigeria faced renewed challenges as global oil prices took a sharp decline. Production averaged around 1.9 mbpd in the first quarter but declined further to approximately 1.8 mbpd by mid-year. The government’s response included enhancing Security and addressing operational inefficiencies, leading to a gradual recovery towards 2 mbpd by the year’s end.
Historical data of oil output in Nigeria in previous years.
Nigeria’s oil production faced another set of disruptions in 2016 and 2017. A resurgence of militant activity in the Niger Delta, a key oil-producing region, severely affected output. Production levels plummeted to a low of 1.4 million barrels per day at the peak of these disruptions in mid-2016. The government implemented a two-pronged strategy to address the situation. Military forces were deployed to enhance security in the region and negotiations with the militant groups simultaneously ensued. These efforts yielded some success, with production stabilizing around 1.9 mbpd by year-end. However, security concerns remained a persistent challenge hindering efforts to achieve consistent production levels.
Again, the year 2017 saw a modest recovery in oil output. The first half of the year witnessed production averaging around 1.8 mbpd. However, the year was not without its setbacks. Occasional Pipeline disruptions and operational challenges caused fluctuations in production, with figures ranging between 1.7 and 2.0 mbpd. The government’s focus on Infrastructure Security and operational reforms provided some measure of stability amidst these ongoing issues. In 2019, the output was affected due to fluctuations in global oil prices and operational issues. Production averaged approximately 1.8 mbpd in the first half of the year but varied between 1.6 and 1.9 mbpd due to intermittent disruptions and uncertainties in the market. Efforts to bolster security and operational efficiency persisted despite these fluctuating market conditions.
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Meanwhile, COVID-19 slammed Nigeria’s oil production in 2020, as global demand and prices plunged. Output halved from 2 to 1.4 mbpd. Lockdowns and a weaker economy further strained production. However, 2021 saw a rebound as oil prices recovered. Production climbed from 1.5 to 1.7 mbpd by year-end. Efforts to improve efficiency and attract Investment aided this rise. In 2022, Nigeria aimed to keep production steady at 1.7 mbpd despite ongoing challenges. Security, efficiency, and investment remain crucial for a healthy oil sector.