Nigeria's Oil Production Booming in 2023 as Gov't Efforts to Boost Crude Output Pay Off

In August 2022, Nigeria's oil production dropped to 972,000 bpd, falling back to Africa’s second-largest oil producer and supplier after Angola, whose oil output hit 1.088 million bpd in the same month. However in late 2022, the country's oil sector revived thanks to the government's efforts to boost production and manage the problem of oil theft.

Nigeria's oil production continued its monthly rise starting from September 2022, reaching a peak in February and raising the country's oil incomes by 51.16 billion Nigerian naira ($111 billion), according to local media, citing data provided by the country’s federal government.

Based on the figures, the country’s oil production, excluding condensate, increased by 48,154 barrels of crude per day during the last month from 1,258,150 bpd in January 2023, recording an output of 1,306,304 bpd in February.

Given that Brent Crude, the international benchmark for crude oil, traded in February 2023 at an average of $82.3 per barrel, Nigeria's revenue from February’s oil production is estimated to have reached $111 million (51.16 billion Nigerian naira).

This comes as the Nigerian federal government has stepped up efforts, since last year, to increase crude oil production in Africa's largest oil producing country and combat theft by vandals and thieves.

In a statement to the media, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, emphasized how oil theft has affected the country’s oil production results.

"Admittedly, one major area of value erosion in the industry is the menace of crude oil theft. Our records indicate that the menace of oil theft has negatively impacted the oil and gas sector for about two decades with attendant huge financial losses to our nation," Komolafe said.

The official stressed that the NUPRC, in cooperation with national law enforcement agencies and the Nigerian National Petroleum Company Limited (NNPC), together with host communities, had been able to reduce oil theft and vandalism of oil pipelines over the past months.

The NUPRC chief executive noted that the commission was focusing on closed wells that could be revived across the country, and in this regard, the watchdog formed a committee in mid-2022 to conduct an industry-wide study on chain reactivation.

"The committee has submitted its report and includes recommendations categorized into quick wins, medium and long-term initiatives that will enhance national oil and gas production volumes," the chief executive stated. "Findings from the report revealed that over 900,000 barrels of oil per day can be earned from the quick win interventions," he said.

In the meantime, Komolafe added, the medium and long-term initiatives could potentially offer an additional 1.2 million barrels of crude oil per day "if properly and fully implemented."

In August 2022, the West African country's crude oil production dropped to 972,000 bpd, according to the information provided by the Nigerian oil regulation commission. Thus, the country's oil production sector turned out to be less than Angola's, which amounted to 1.088 million bpd in the same month.

Eventually, by December 2022, Nigeria managed to regain its position as Africa's top oil producer with 1.235 million bpd, according to the Organization of the Petroleum Exporting Countries.

The Nigerian National Petroleum Company revealed that Nigeria had seen a surge in oil theft in recent years, which resulted in a loss of nearly 600,000 bpd and forced the company to intensify surveillance over its facilities.