Nigeria has been having oil thefts and other production problems for quite a while now. There is no doubt that oil production has been low consecutively for the past years. However, the thefts and vandalism acts have crashed earnings by an even larger amount.
Despite this, OPEC has also made public its findings and forecasts about the upcoming quarters and 2023. Overall the cartel’s forecasts seem optimistic about the long political uncertainty that the Ukraine war caused.
On the other hand, it also says demands globally might be falling. Things for Nigeria are quite positive as the rates have been stable for the past quarter.
Nigeria’s Forecast Production And Goals
Nigeria has been optimistic about its oil production and thus planned to produce 40 billion barrels by the end of 2021.
However, the country didn’t achieve this goal in the past years. The country hasn’t made profits recently, and the recent oil production was around 36 billion, 4 billion below the target. 2022 was a blow to past expectations.
Nigeria is constant with figures of 36-37 billion barrels for the past years. Nonetheless, OPEC has assured that the country will have a safe future in this regard because while production has been low, it has been stable on record and not fallen below the average rate.
The main reasons OPEC forecasted the global oil demand to fall are these:
- Increased chances that counties might rely on COVID expectations and impose some restrictions
- The political uncertainty surrounding the Russia-Ukraine war has rendered many high expectations false
Moreover, there are other reports about OPEC issues, and all of those are public this month. The MOMR, also called the monthly oil market report, has told that the forecast for this month in Nigeria is 100.03 million barrels.
If this is the rate per day, all it would take for Nigeria to reach its 40 billion annual goals is control over oil thefts and vandalism.
Oil Losses Nigeria Faced
Vandalism has been an issue for a long time now because the authorities never took it seriously in the beginning. In the second quarter of 2022, the overall oil production in Nigeria fell by 15 million barrels. Now there are some chances of a boost in demand because of Chinese agreements. However, the plunge in earnings was huge. The core reason for the sudden fall was, again, oil thefts. Some other reasons include:
- Decaying oil facilities because there isn’t proper maintenance
- The incompetence of national oil companies in reaching goals the government set
- Many oil wells in Nigeria have long been shut off, and there is no sign of revival
Therefore, Nigeria’s facilities are not using the available resources to the full capacity. If they do so, they might easily surpass the 40 billion barrel goal.
The NNPC App
The government has even recently made an application to control the theft of crude oil. The launch of this new app by NNPC, or the Nigerian National Petrol company, has many goals.
Mele Kyari is the chief detective of NNPC, who reported to the news that Nigeria faced a loss of nearly $4 billion in 2021. The only reason for this loss was oil theft. The rate of vandalism was nearly 200,000 b/d in 2021.