Nigeria’s daily average oil production rose by 7.38 percent year-on-year in December 2024 to 1.667 million barrels per day, bpd from 1.552 million bpd, including condensate, recorded over the corresponding period in 2023.
The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, in its latest oil production data, however, indicated that on a month-on-month basis, daily average oil output in December 2024, declined by 1.35 percent from 1.690 million barrels per day recorded in November, 2024, to 1.667mbpd. Data from the Commission also indicated that daily peak oil production in December 2024 was 1.79mbpd while the lowest daily production was 1.57mbpd.
Cumulatively, oil output in December 2024, was 51.69 million barrels, a marginal increase of 1.9 percent when compared to 50.71 million barrels produced in November 2024. Further analysis of the data showed that the highest oil output in December 2024 was recorded at Forcados Terminal at 8.49 million barrels followed by Bonny Terminal, 7.78 million barrels and Qua Iboe, 4.15 million barrels.
The data showed without condensate, daily oil production was 1.484 million, indicating that Nigeria, again, failed to meet its oil production quota of 1.5mbpd allotted to it by the Organization of Petroleum Exporting Countries, OPEC. The December 2024 average daily oil output also means that Nigeria failed to meet the 1.7mbpd benchmark set for the 2024 budget all through the year. NUPRC data on daily average production showed that oil production including condensate in January 2024 was 1.64mbpd; February, 1.53mbpd; March, 1.44mbpd; April, 1.45mbpd; May, 1.47mbpd; June, 1.50mbpd; July, 1.53mbpd; August, 1.57mbpd; September, 1.54mbpd, October, 1.54mbpd; November, 1.69mbpd; and December, 1.67mbpd.
Why oil output rises—Lokpobiri
Reflecting on the improvement in oil production, the Minister of State Petroleum Resources (Oil), Senator Heineken Lokpobiri said the removal of regulatory bottlenecks and collaboration amongst stakeholders resulted in the increment in oil production. Lokpobiri wrote: “With the Presidential directive to ramp up oil production to a sustainable level, the journey of transformation in our oil sector began. This visionary directive by President Bola Ahmed Tinubu, as broad as it was, became the cornerstone of my commitment and that of my team.
“We embraced it wholeheartedly, engaging stakeholders both domestically and internationally to build synergy and foster partnerships. Through these efforts, we successfully attracted significant investments and strengthened institutional frameworks, driving the remarkable transformation we see today in the sector. “From the production level of 1mbpd when we began, we have boosted output to 1.8mbpd, inclusive of condensates, and continue to aspire for even greater heights.
Our achievements include attracting foreign investment decisions, winning the bid to host the Africa Energy Bank, sustaining peace across Host Communities through robust community engagements, and fully deregulating the downstream sector, ensuring constant availability of petroleum products. “We have also eliminated bureaucratic bottlenecks in licensing, facilitated capacity building for indigenous players, and introduced numerous reforms too extensive to list”.
He added: “Reflecting on this journey, it is evident we have made remarkable strides. From where we started to where we are now, the progress is undeniable. With these accomplishments, the future promises even greater growth and development for the benefit of Nigerians”. Pipeline vandalism, theft, others hinder output However, there are indications that pipeline vandalism, oil theft, and illegal refining have combined to reduce Nigeria’s oil output by 5.6 per cent to 1.7 million barrels per day, bpd in November 2024, from 1.8 million bpd peak output recorded in October 2024.
The federal government, which declared the peak output of 1.8 million bpd in October 2024 attributed it to renewed efforts to boost production in line with President Bola Tinubu’s directive. But the NUPRC’s Oil Production Status report put the nation’s November 2024 output, including condensate at 1.7 million barrels per day, bpd. Checks by Vanguard indicated that from the International Oil Companies, IoCs to their indigenous counterparts, almost all operators have at different times experienced many attacks, especially pipeline vandalism and oil theft in Nigeria. For instance, in early August 2024, Shell recorded oil spill cases in Assa Rumuekpe Pipeline at Elele- Alimini, Rumuekpe Nkpoku Pipeline at Rumuji, and Kolocreek-Rumuekpe Pipeline at Odau, according to the company’s Oil Spill Incidents Data obtained by Vanguard. Similarly, in July 2024, the company, which attributed a greater per cent of the spills to pipeline vandalism, oil theft and illegal refining, recorded incidents in Tunu Brass Creek Delivery Line at Agbidiama, Bomu Bonny TNP at Bodo City, Rumuekpe Nkpoku Pipeline at Mbodo Aluu, Assa Rumuekpe Pipeline at Umudioga, Kolocreek Well 22T flowline at Imiringi, Nkpoku Manifold at Rumujima, and Assa Rumuekpe Pipeline at Elele- Alimini. Also, in June 2024, Shell recorded other incidents in Yokri Manifold 8HP Bulkline – Riser at Yokri, Okordia Rumuekpe Pipeline at Edeoha, Okordia Rumuekpe Pipeline at Ikata, Bomu Bonny Pipeline at Freetown, Trans Ramos Pipeline at Obotobo, Kolocreek – Rumuekpe Pipeline at Rumuekpe, Kolocreek – Rumuekpe Pipeline at Okoma, Oguta well 6 wellhead at Oguta, Etelebou Flowstation at Etelebou, Kolocreek Rumuekpe Pipeline at Owerewere, Rumuekpe Nkpoku Pipeline at Rumuji, Bomu Bonny Pipeline at Owokiri, Rumuekpe Nkpoku Pipeline at Rumuekpe, Trans Ramos Pipeline at Ogbotobo, Ogale Bomu Pipeline at Egbalor, and Adne Well 2 Flowline at Biseni, Kolocreek – Rumuekpe Pipeline at Ihuowo. Most oil spills caused by oil theft, sabotage— Shell In its latest briefing notes obtained by Vanguard, Shell stated: “Most oil spills in the Niger Delta region are caused by crude oil theft, the sabotage of oil and gas production facilities, and illegal oil refining, including the distribution of illegally refined products. In 2023, about 94% of the oil spills of more than 100 kilograms from SPDCoperated facilities were caused by illegal activities of third parties – 139 incidents with a total volume of 1.4 thousand tonnes, compared to 75 incidents in 2022 with a total volume of 0.6 thousand tonnes.
“The increased number of spill incidents in 2023 can directly be attributed to an increase in illegal connections to pipelines, with 119 of the 139 incidents caused by illegal connections. However, through daily inspections from the air and on the ground, we are identifying illegal connections. A total of 675 illegal connections were removed from SPDC pipelines in 2023, compared to 468 in 2022. Through these measures we have made progress, but illegal connections continue to be a challenge.”
Shell is not alone as these attacks have also caused other IoCs, including ExxonMobil and Eni to divest their land and swamp oil and gas to assets to indigenous companies and move to the offshore and deep offshore assets, which require advanced technologies.
NNPC, security agencies uncover 33 illegal oil connections
Meanwhile, the Nigerian National Petroleum Company Ltd has uncovered 33 illegal crude oil connections in the Niger Delta at Ebubu,and Akwa Odogwa in Rivers state, Otokutu and Otor Eboh in Delta state, and Twonkubu, Fantuo, Igbeta-Ewoama, Okpoama and Ondawari in Bayelsa state. The company in partnership with security agencies said it has destroyed 72 illegal refineries and arrested 42 suspected oil thieves between August 18 and 23, 2024.
In a video obtained from the NNPC social media handles, it uncovered 12 sites used in storing stolen crude oil while over 204 incidents of crude oil theft were recorded during the period.
Investors go for new oil, gas assets
However, with the existence of Nigeria’s Petroleum Industry Act, a comprehensive legislation of 2021, targeted r e s t r u c t u r i n g , repositioning, improving governance, enhancing investment and sustainable growth, the nation’s oil and gas industry attracted much attention of investors in 2024 than before. The interest was demonstrated in the 2024 Licensing Round, launched in May, this year, which culminated in many International Oil Companies, IOCs and indigenous oil and gas companies emerging winners of the 25 blocks in December.
For instance, Sifax & Royalgate Consortium and Ocean Gate Engineering Oil won PPLs 300 –Do and 302-Do respectively, while MRS Oil and Gas Limited that won 303-Do has NNPC Limited E&P as the reserve bidder. Also, Sifax & Royalgate Consortium won PPL 304 with Homeland Integrated Offshore Services Limited as the reserve bidder while Hakilat Oil and Gas Consortium Limited won PPL 305 with NNPC E&P Limited as the reserve bidder.
Hakilat Oil and Gas Consortium Limited won PPL 305 with NNPC E&P Limited as the reserve bidder while Biswal Oil and Gas Limited long-standing NNPC E&P Limited as the reserve bidder. Petrolli Energy Marketing & Supply Limited won PPL 269 with Afagaf Company Limited as reserve bidder while Sahara Deepwater Resource Limited won PPL 270 with AMG E&P Company Limited as reserve bidder. Also, Sahara Deepwater Resource Limited won PPL 271with RBO Energy Services Limited as reserve bidder while Panout Oil & Gas Limited won PPL 300/ 301with Petroli Energy Marketing & Supply Limited a reserve the bidder. Total Energies E&P Nigeria E&P Nigeria won PPL 2000 with Star Deepwater Petroleum Limited as the reserve bidder while Biswall Oil and Gas Limited won PPL 2002. First E&P Development Company Limited, Dewayles International Limited and Applefield Oil and Gas Limited won PPLs 2003, 2004 and 2005, respectively. First E&P Development Company Limited, R28 Holdi,ngs Limited, Tulcan Energy E&P Company Limited and Ocean Gate Engineering Oil and Gas Limited won PPLs 2006, 2007, 2008 and 2009, respectively. Also, R28 Holdings Limited, Tulcan Energy E&P Company Limited, Panout Oil & Gas Limited, Hakilat Oil and Gas Consortium Limited and Applefield Oil and Gas Limited won PPLs 3011, 3012, 3015, 3016 and 3017, respectively. Speaking at the event, the Chief Executive of NUPRC, Engr. Gbenga Komolafe, said: “The 2024 Licensing Round, launched in May, represents a significant leap in our hydrocarbon development strategy. The licensing round offers twenty-four (24) carefully selected blocks spanning onshore, shallow water, and deep offshore terrains. Complementing these are the seven deep offshore blocks carried over from the 2022 Mini Bid Round, bringing the total to thirtyone (31) blocks. Together, these assets hold enormous potential for economic growth, energy security, and technological advancement.”
Also, Olufemi Soneye, Chief Corporate Communications Officer of NNPCL, expressed optimism that on-going efforts by the Mele kyari-led board of the firm will yield positive impact. According to him, some of the Executive Orders which President Bola Tinubu put in place earlier in the year are being translated into the positive development being witnessed in the oil and gas space.
We’ve introduced critical regulations — NUPRC
The strides would not have come without effective regulation as other measures. In his recent report, Engr. Komolafe, said: “We have successfully introduced critical regulations in collaboration with industry stakeholders that operationalise the PIA and entrench regulatory clarity, predictability, and transparency. So far, 25 priority Regulations have been developed and 17 gazetted. This approach has optimised regulatory processes and has boosted investors’ confidence.
Working with industry stakeholders, we have implemented initiatives to grow oil and gas reserves through studies and development activities to the current levels of 37.5 billion barrels of Oil and 209.26 trillion Cubic Feet of Gas, representing 30% and 33% of Africa’s oil and gas reserves, respectively.
“Maintaining a healthy Reserves to Production ratio is key to ensuring the longterm sustainability of Nigeria’s energy resources, with due cognisance to global energy dynamics. To this end, we are confident that the ongoing activities of Petroleum Prospecting Lease, PPL Awardees and the Licensing Rounds will further boost Nigeria’s position and unlock additional opportunities for resource valorisation. Our efforts are yielding satisfactory results as evidenced by the level of upstream activities within the past year. The industry has witnessed a notable increase in rig activities, well intervention, and field developments, signalling a positive trend to boost production.
“This uptick reflects both the impact of regulatory reforms driven by the Commission and a renewed focus on maximising the potential of our oil and gas assets. We are glad to report that with the concerted efforts of relevant stakeholders, production has grown from 1.2 million to 1.6 million bpd. Although we acknowledge these modest gains as graciously alluded to by Mr. President in his August 2024 speech to the nation, this is far short of the Presidential charge to us to grow production to sustainable and economic levels.”
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