Nigeria: continued crude theft and workers’ strike bring production to new low

Nigeria produced 37.35 million barrels of crude oil and condensate in April this year, loosing 10 million barrels from its March production levels, according to data from NUPRC.

This brought the country’s average daily oil production below the 1 million barrels of oil per day (bopd) threshold, in a country where production capacity stands at over 2 million bopd.

Africa’s largest oil producer continues to be hit hard by severe crude theft from onshore assets. These used to represent almost 40% of production before COVID-19, but their share of output fell to only a fourth of the country’s daily oil and condensates volumes last year.  

Despite intense efforts from authorities to curb crude theft, results have been limited. “From March 2022 to March 2023, we removed 460 illegal connections on the Trans-Niger Pipeline so we could lift force majeure from our Bonny Terminal,” said Osagie Okunbor, Chairman of the Shell Companies in Nigeria, at the recently concluded Nigeria Energy Summit in Abuja. “However, we are now struggling to catch up our repair programs vis-à-vis new attempts to steal crude oil,” he confessed.

So far, Shell’s Bonny Terminal has been able to export only between 2 and 3 million barrels per month in 2023, against traditional monthly volumes of 6 to 8 millions three years ago.

But the biggest blow to the country’s production came from a wide strike organized by ExxonMobil workers in April 2023, forcing the American major to declare a Force Majeur at its four terminals in Nigeria.

Data from NUPRC shows a loss of 4.6 million barrels at the ExxonMobil terminals between March and April 2023, including at Qua Iboe (-2.3 million barrels), Erha FPSO (-1.3 million barrels), Usan FPSO (-480,000 barrels) and Yoho FSO (-473,000 barrels).

ExxonMobil was only able to resume normal operations at the end of April after successful negotiations with the workers.

In its most recent report on Nigeria’s upstream industry, Hawilti forecasted a total production of some 1.57 million barrels per day in 2023. The forecast remains heavily dependent on a recovery of onshore volumes by implementing crude theft mitigation measures.

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