Nigeria, Africa’s largest crude oil producer, failed to produce 30.6 million barrels of oil in January and February compared to the quota allocated to it by the Organisation of Petroleum Exporting Countries (OPEC) during the period.
Nigeria was expected to produce 106.2 million barrels of oil in the two months but could only drill 75.5 million barrels. In January, Nigeria drilled 39 million of the 55 million barrels allocated to it while in February, it produced only 36.5 million of the total projected output of 50.4 million barrels.
The 13-member OPEC group distributes oil production quotas to its members based on market conditions to ensure price and supply stability in the global oil market. Nigeria’s share of the quota was 1.8 million barrels per day for both months under review.
Nigeria has been unable to meet its OPEC production quota for more than two years due to oil theft and pipeline vandalism in the Niger Delta.
Nigeria’s production increased to 1.3 million barrels per day in February from 900,000 bpd in the second half of last year after the government, in collaboration with local security groups, took steps to curb the menace.
The former Minister of State, Petroleum Resources, Chief Timipre Sylva, had pledged that Nigeria was on its way to fulfilling its production obligation in May this year, while the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mallam Mele Kyari, promised that Nigeria intends to hit 2.2 million bpd, without OPEC restrictions this year.
Meanwhile, the shortfall in Nigeria’s production against the OPEC quota of 1.8 million bpd in the 2023 Nigerian budget resulted in a deficit of about 23.7 million barrels in both months.
Despite the rise in production and the $83 price per barrel of oil for both months, the country could have lost as much as $2 billion in gross revenue, translating to about N920 billion at the N460 to a dollar official exchange rate.