October 18, 2022

Oil theft: Sept crude oil production drops by 24.73%

Oil theft


By Obas Esiedesa

NIGERIA’S crude oil production crashed by 24.73 percent in September 2022 to 937,766 barrels per day, compared to 1.246 million barrels per day recorded over the corresponding month in 2021, the latest data from the Federal Government has shown.

According to data released by the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, crude and condensate production for September 2022 was 1.137 million barrels per day, compared to 1.179 million barrels produced in August 2022.

Condensate productions are not part of Nigeria’s quota set by OPEC at 1.8 million barrels per day.

NUPRC data showed that the highest production in September came from Qua Iboe at 4.976 million barrels followed by Escravos at 3.272 million barrels during the month.

With the country battling to curb the activities of oil thieves and pipeline vandals that have crippled its oil industry, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, NNPCL, Mr. Mele Kyari has explained that what is stolen is not the difference between OPEC quota and the production figure.

Kyari disclosed that all major oil trunk lines have been shut down due to the activities of oil thieves and pipeline vandals.

“Today our production is around 1.23 million barrels per day. We have a proven production capacity of 2.49mbpd. But since Covid abated and the acts of vandals returned, we saw this gradual decline in our production to the point of 1.2mbpd.

“That means we can easily produce 2.49mbpd but we can’t do it because of acts of vandals. Now it doesn’t mean that the difference between 2.49m and 1.23m is stolen. As we speak, all our major trunk lines are shut down, which means we are not flowing crude oil in these lines. We could do it and it doesn’t mean crude is stolen. When the lines are running, you can lose a substantial part of that volume up to 200,000 barrels.

“In actual losses today, our budget level plan is to produce at 1.8mbpd and if you are doing 1.23m it means you are losing the difference between 1.23m and 1.8m which is around 600,000 barrels per day. This is an opportunity lost, not stolen”, he added.

Concerned by dwindling oil production, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, has expressed its determination to take bold and revolutionary steps, using a non-kinetic approach, to address the challenges of crude oil theft, improve national crude oil production and save the country’s economy from further degeneration.

Chief Executive, Engr. Gbenga Komolafe explained that although the Commission is not an operator/producer, it has a statutory responsibility as a regulator to probe into the situation and seek drastic solutions to the challenges as the current situation has seriously affected the country’s economy and posed a huge challenge to the funding of the national budgets.

He said “The Commission will do everything within its authority to challenge the narrative and halt further degeneration by ensuring transparency in hydrocarbon accounting.

“One of the steps, in line with its technical and regulatory powers, is to probe into the operational and commercial activities of exploration and production companies operating within the country to ascertain the level of compliance with the terms and conditions in their operational contracts, as well as the challenges impeding expected deliveries.

“The commission will particularly be interested in the mode of operation of the companies in relation to the approvals as per their operational licenses, the level of conformity with the technical provisions and production terms, their level of investments to enhance capacity utilization, and the challenges they are facing, especially those contributing to the current unacceptable situation”.

He stressed that the commission will be “engaging all the exploration and production companies individually to get to the root of the current situation as it believes strongly that there might be more fundamental issues in the industry affecting expected output and deliveries beyond the much-touted issue of crude theft.

“Already invitations have been extended to all the operators for the engagement during which they would be expected to present their work programme performance, acreage status, divestment plans (if any), field development plan, FDP, implementation status, Upstream investment in the last five years, exploration activities including geophysical acquisition/processing/re-processing, leads and prospects maturation plans; and exploratory wells drilled in the last five years,” he added.