25th June, 2023
Nigeria is no longer Africa’s largest crude oil producer due to disrupting production levels, according to the U.S Energy Information Administration (EIA).
In its latest report on ‘Country Analysis Brief: Nigeria’, EIA said Angola had overtaken Nigeria due to unplanned production outages.
The report partly read, “For many years, more crude oil was produced in Nigeria than in any other country in Africa. However, unplanned production outages—or disruptions—in Nigeria have, at times, resulted in its crude oil production falling below that of Angola, the second-highest producing country in Africa. Disruptions remain a significant and persistent downside risk to Nigeria’s crude oil production”.
EIA further explained that Angola’s production output surpassed that of Nigeria in April.
“In the third quarter of 2022, operators of the Trans Niger pipeline and the Forcados export terminal closed their facilities for repairs. The closures triggered a sharp drop in Nigeria’s crude oil output, from 1.1 million barrels per day (b/d) in the second quarter to below 1 million b/d in the third quarter.
“Nigeria’s production recovered by the beginning of 2023, but the oil workers’ strike disrupted production again in April 2023. Crude oil production in Nigeria fell to slightly more than 1 million b/d in April of this year, dropping below Angola’s production, which was estimated at 1.1 million b/d that month,” the report said.
According to data from the Organisation of Petroleum Exporting Countries, Angola produced 1.063 million barrels per day in April, while Nigeria produced 999, 000 barrels per day.
The agency then highlighted actions already made by the Nigerian government to make the country more appealing for oil and natural gas investment.
“On August 16, 2021, the Petroleum Industry Act was passed in Nigeria. The legislation is the culmination of a 20-year effort to overhaul the hydrocarbon industry’s legal framework, attract investor interest in upstream development, and address grievances of communities affected by oil extraction,” it further stated.
It listed changes to Nigeria’s hydrocarbons legal framework, such as the establishment of two distinct industry regulators, the Nigerian Upstream Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority; restructuring the Nigerian National Petroleum Corporation (the national oil company), lowering the tax and royalty structure for crude oil production, and modifying terms and conditions for upstream licencing and leasing.
Despite the legislative reforms, oil theft and sabotage of export infrastructure remained serious problems because the destruction caused production losses and environmental contamination.
“Crude oil disruptions often force oil companies to shut down production and limit their ability to export crude oil,” EIA asserted.