Oil Theft, Subsidy, Fuel Scarcity are among some of the challenges which the Federal Government tried to address in the Nigeria’s oil and gas sector in the outgoing year.
However despite its efforts, little success has been recorded by the Major General Muhammadu Buhari (retd.), led administration.
Despite recent improvements, Nigeria’s crude oil output plunged between January and September of this year due to widespread oil theft in the Niger Delta.
In fact, in September, oil production dropped to a multi-year low of 937,766 barrels per day. The country has often failed to meet its Organization of the Petroleum Exporting Countries-mandated monthly oil production limit of 1.8 million barrels per day.
The Nigerian Upstream Petroleum Regulatory Commission’s data revealed that between January and September, crude oil production consistently decreased month over month.
Nigeria produced 1.39 million barrels per day in January 2022, but this fell to 1.26 million barrels per day in February and then to 1.24 million barrels per day in March.
In April, the nation’s oil production fell to 1.22 mbpd, continuing its downward trend. In May, it fell even lower to 1.02mbpd before edging slightly upward to 1.16mbpd in June.
However, the little gain in oil production in June did not last, as it fell to 1.08 million barrels per day (bpd) in July, even further to 0.97 million in August, and finally to its record-low of roughly 0.94 million in September.
Also, the country’s oil production increased slightly to 1.01 mbpd in October. Because crude oil production increased to 1.18 million barrels per day in October, the rise continued in November.
Chief Upstream Investment Officer, NNPC Upstream Management Services,Bala Wunti, claimed in a television interview earlier this month that Nigeria was losing an estimated 700,000 barrels of crude oil daily before the latest recovery began around two months ago.
He said, “From our records, before we recovered, we were losing 700,000bpd translating to 21 million barrels per month, and if you consider an average price (of crude oil) this year at $90/barrel, that will translate to somewhere around $1.8bn or $1.9bn losses that we suffered.”
He explained that oil theft due to vandalism stalled production and the delivery of crude oil from many terminals in the Niger Delta region.
National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, commented on the sector’s performance in 2022, saying Nigeria was bleeding from double oil industry losses.
He stated that the first industrial loss was caused by enormous oil theft in the Niger Delta, while the second was caused by the Federal Government’s massive spending on PMS subsidies through NNPC.
Apart from oil theft, the Nigerian oil sector has experienced frequent gasoline scarcity since the beginning of this year.
Many Nigerian states are still suffering from a lack of PMS, despite attempts by oil marketers and the NNPC to remedy the situation.
While professing a solution, officials from IPMAN, PETROAN, and the Major Oil Marketers Association of Nigeria indicated that the key solution to Nigeria’s fuel problem was for the country to discontinue subsidizing and totally deregulate the downstream oil sector.
They also stated that it was critical to restart Nigeria’s refineries in order to lessen the country’s reliance on imports.
