Oil production plunge caused by pipeline problem – FG

The Federal Government, on Friday, said the drop in Nigeria’s crude oil production was due to issues encountered on the Trans Niger Pipeline, coupled with maintenance activities carried out by some oil companies operating across the country.

It, however, stated that efforts were on to fix the pipeline, adding that this would enable the country to produce up to 1.7 million barrels per day of crude oil and condensates.

The Trans Niger Pipeline is a major oil pipeline in Nigeria that transports crude oil extracted from oil fields in Rivers and Bayelsa States to the Bonny Crude Oil Export Terminal.

It is operated by Shell Petroleum Development Company Joint Venture, with a capacity of about 180,000 barrels of crude oil per day, which is about 15 per cent of Nigeria’s daily output.

The Trans Niger Pipeline is an important part of Nigeria’s oil infrastructure, but it has faced significant challenges in recent years.

Our correspondent had earlier reported that Nigeria’s crude oil production witnessed the second consecutive monthly decline this year, as it dropped to 1.231 million barrels per day in March, according to the latest report from the Organisation of Petroleum Exporting Countries.

Reacting to this on Friday, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, said the drop in production was due to issues encountered on the Trans Niger Pipeline.

Lokpobiri disclosed this in a statement issued in Abuja by his Special Assistant on Media and Communications, Nneamaka Okafor.

The statement read in part, “In response to recent concerns regarding a shortfall in oil production in Nigeria during the first quarter of 2024, the Minister of State for Petroleum Resource (Oil), Senator Heineken Lokpobiri, assures (Nigerians) that measures are being taken to address the situation to, not only restore production to previous levels but to also increase it.

“The minister clarifies that the reported production shortfall was primarily due to issues encountered on the Trans Niger Pipeline, coupled with maintenance activities carried out by some oil companies operating in Nigeria.

“The minister is also pleased to announce that the issues have been adequately addressed, and production is expected to return to its previous levels in the coming days.”

OPEC stated in its latest Monthly Oil Market Report for April 2024 that crude oil production details, which it got through direct communication from Nigeria, showed that the country pumped less oil in March when compared to what was produced in February.

Data from the report indicated that Nigeria produced 1.322 million barrels per day of crude in February this year, but dropped to 1.231mbpd in March, representing a plunge of 91mbpd.

The report further stated that the country had produced 1.427mbpd of crude in January, but that was not sustained in February as it dropped in that month, while southward oil production continued in March.

OPEC data, however, showed that the country’s average crude oil production in the first quarter of 2024 was 1.327mbpd, higher than the 1.313mbpd average oil production in the fourth quarter of 2023.

Nigeria’s first-quarter oil output in 2024 was also higher than the 1.201mbpd average production in the third quarter of last year.

Oil theft and pipeline vandalism have severely impacted Nigeria’s oil production, causing output to fall below OPEC-approved levels.

Meanwhile, Lokpobiri anticipated that “Nigeria’s oil production, including condensate, which was approximately 1.7 million barrels per day prior to these developments, will soon be restored.”

He also stated that the Federal Ministry of Petroleum Resources was actively engaged in policy evolution aimed at maximising the utilisation of all available wells in Nigeria.

“This strategic approach will enable the country to ramp up production, thereby generating vital revenue to stabilise the nation’s foreign exchange reserves.

“The increased revenue will also empower the government to fulfil its commitments to providing essential infrastructure, as outlined in the 2024 budget,” the statement stated.