Crude oil production which accounts for around two-thirds of government revenue and 90 per cent of its foreign exchange reserves, contracted by 13 per cent year-on-year in the fourth quarter of last year, the Nigerian Bureau of Statistics has said.
The bureau in its latest report said Nigeria recorded an average oil output of 1.3 million barrels per day in the fourth quarter, lower than the daily average of 1.5 million bpd registered in the same quarter of 2021.
“Although the agriculture sector grew … its performance was significantly hampered by severe incidences of flood experienced across the country,” the NBS said.
“The Industry sector was … challenged recording -0.94 per cent growth and contributing less to the aggregate GDP relative to the third quarter of 2022 and the fourth quarter of 2021.”
The price of diesel, which many businesses rely on to generate electricity, has soared in Nigeria due to high global oil prices, leading to increased costs of production.
The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari, had recently blamed low crude oil production on vandalism of oil pipelines which led to theft.
The NBS report came on the heels of the Organization of the Petroleum Exporting Countries Monthly Oil Market Report for January, that showed that Nigeria’s oil rig count had been on an upward trajectory in the last one year.
The country’s rig count went from nine recorded in the third quarter of last year to 13 as of this year’s January.
As of 2019, Nigeria’s rig count was 16. It dropped to 11 in 2020, and further decreased to seven as of the fourth quarter 2021. By first quarter 2022, it increased to eight, and then 10 by the second quarter 2022, and then 11 by July 2022, before dropping to nine as of Q3/2022. It had however been on a consistent rise since the fourth quarter of last year.
A check on the country’s crude oil production also showed that output was gradually increasing, going from 900, 000 barrels per day as of Q3/2022, to 1.1mb/d in Q4/2022, 1.2mb/d in December 2022, and 1.2mb/d this January, according to OPEC data quoting direct sources.
Kyari had during the official cutover ceremony for transforming NNPC to NNPCL held in Abuja last Friday, said the country was on its way to producing 1.8mb/d of crude oil as assigned by OPEC.
The country had for the past two years, failed to meet up with OPEC’s production quotas due to vandalism of the country’s pipelines and oil theft.
“As of yesterday, we had crossed 1.6 million barrels per day, this is not rocket science. We have a line of sight to recover to the quota level of 1.8 million barrels per day. I know it is not far away, probably two to three months maximum, but we will be there and that will bring back partners to invest, return the confidence of our investors and ultimately bring back growth”, Kyari said.
