From Adanna Nnamani, Abuja
Nigeria is taking slow but steady steps towards meeting its crude oil obligations as th average daily production experienced a slight increase, reaching 1.276 million barrels per day in June. This represents a marginal rise of 25 thousand barrels daily from the 1.251 million barrels per day recorded in May. This information comes from the Organisation of Petroleum Exporting Countries (OPEC) monthly oil market report for June 2024, based on direct communication with Nigerian authorities.
However, secondary sources report that Nigeria’s daily average crude oil production in June was 1.362 million barrels per day, which is a decline of 10 thousand barrels compared to the 1.372 million barrels per day recorded in May. Despite this decrease, Nigeria maintained its position as Africa’s largest oil producer, closely followed by Libya, which produced 1.2 million barrels per day in June.
Among OPEC+ countries, Russia surpassed Saudi Arabia as the leading oil producer, with an average daily production of 9.14 million barrels, while Saudi Arabia produced 8.93 million barrels per day. The total crude oil production among OPEC+ members, also known as the Declaration of Cooperation (DoC) group, stood at 40.81 million barrels daily, reflecting a decline of 125 thousand barrels from the previous month.
For OPEC members alone, total crude oil production decreased by 80 thousand barrels to 26.57 million barrels daily, down from 26.65 million barrels per day in May.
The OPEC Reference Basket (ORB) saw a slight decline of 37 cents, or 0.4%, month-on-month, averaging $83.22 per barrel in June. Meanwhile, the ICE Brent front-month contract remained steady at $83.00 per barrel, and the NYMEX WTI front-month contract saw a minor increase of 8 cents, or 0.1%, to average $78.70 per barrel.
It is crucial to note that Nigeria’s average crude oil production of 1.27 million barrels per day in June means the country has consistently failed to meet its OPEC production quota of 1.5 million barrels per day and its budget target of 1.78 million barrels per day for the first half of 2024. This persistent shortfall hampers the revenue mobilization efforts of President Tinubu’s administration. The Minister of Petroleum Resources, Heineken Lokpobiri, previously announced a target of two million barrels of daily production starting next year, but achieving this goal appears challenging given the current outlook.
Nigeria’s oil sector continues to be plagued by issues of insecurity and low investment, compounded by the exit of International Oil Companies (IOCs) and ongoing problems related to the approval of oil asset transfers. Earlier this month, the Nigerian National Petroleum Corporation Limited (NNPCL) declared an intensified effort to address these challenges, as crude oil production has stagnated over the past five months.
Penultimate week, the Group Chief Executive Officer of the Nigerian National Petroleum Limited (NNPC Ltd), Mele Kyari, asked the federal government to declare a state of emergency on crude oil production as it continues to tank despite numerous resources and strategies deployed to turn things around.