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Nigeria crude oil production shrinks despite doubling oil rig count to 32

NIGERIA’s crude oil production has not improved in the last four years despite the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) doubling the country’s oil rig count to 32.

The NUPRC chief executive, Gbenga Komolafe, declared this before the Senate Committee on Appropriation on Tuesday, January 14.

He said Nigeria’s rig count doubled from 16 in 2021 to 32 in 2024, adding that the increase in rig count reflected ongoing efforts to boost upstream activities and enhance the country’s crude oil production capacity.

“Nigeria’s rig count, which stood at 16 as of 2021, has now doubled to 32 under the commission’s oversight.

“This increase reflects ongoing efforts to boost upstream activities and enhance the country’s crude oil production capacity,” Komolafe said.

The ICIR analysis of NUPRC oil production data agrees with Komolafe’s stance that crude oil production failed to improve despite doubling the oil ring count.

Nigeria’s total oil production, including crude oil, blended condensate and unblended condensate, averaged 1.62 million barrels per day (mbpd) in 2021.

Production dropped to an average of 1.38mbpd in 2022 and recorded a marginal rise to 1.47mbpd in 2023.

While an oil rig refers to a structure designed for drilling wells into the earth to extract oil and natural gas, the oil rig count refers to the number of oil rigs actively drilling for oil in a particular region or country.

The number of rigs is crucial in assessing the level of oil production activity and a higher rig count typically suggests increased oil production, while a lower count indicates reduced activity, according to industry experts.

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Last year, at the 23rd edition of the Nigeria Oil and Gas Conference and Exhibition (NOG Energy Week) in Abuja, the state-owned oil firm, Nigerians National Petroleum Company Limited (NNPCL), declared a state of emergency on crude oil production.

“We have decided to stop the debate. We have declared war on the challenges affecting our crude oil production. War means war.

“We have the right tools. We know what to fight. We know what we have to do at the level of assets. We have engaged our partners. And we will work together to improve the situation,” the NNPCL boss, Mele Kyari, assured.

However, crude oil production volume continues to be below the benchmark target, leaving experts to frown at Nigeria’s inability to meet its Organisation of Petroleum Exporting Countries (OPEC) quota of 1.5 million bpd.

As Nigeria continues to fund budget deficit year after year, an energy expert, Joe Nwakwue, believes that every Nigerian should be worried about the output level of the nation’s oil production with the rise in the price of crude oil at the international market.



Another expert, Kalu Aja, noted that crude oil remained Nigeria’s major source of revenue and should be guarded jealously.

“Our inability to meet up with our OPEC quota is a major concern,” he said.




     

     

    In its Monthly Oil Market Report, released on Wednesday, January 15, OPEC revealed that Nigeria’s crude oil production, based on direct communication, fell to 1,485 in December 2024 from 1,486 in November.

    The OPEC was, however, hopeful that the ongoing operational ramp-up efforts at Nigeria’s new Dangote Refinery and its gasoline exports to the international market would likely weigh further on the European gasoline market.

    It added, “Continued gasoline production in Nigeria, a country that has relied heavily on imports to meet its domestic fuel needs in the past, will most likely continue to free up gasoline volumes in international markets which will call for new destinations and flow adjustments for the extra volumes going forward.”

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    Meanwhile, the NUPRC has projected a crude oil production (oil and condensate) of at least 2.1mbpd in 2025.

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