Nigeria Oil Production Reaches 1.8 Million Barrels a Day

Nigeria’s hydrocarbon production has ramped up to 1.8 million barrels a day (MMbd) of oil and 7.4 billion cubic feet per day of gas this month, with the possibility of crude production increasing to two MMbd by the end of 2024, the national oil and gas company said.

The level grew from 1.43 MMbd last June, Nigerian National Petroleum Co. Ltd. (NNPC) said. Chief executive Mele Kyari credited the country’s Production War Room, launched that month.

“The team has done a great job in driving this project of not just production recovery but also escalating production to expected levels that are in the short and long terms acceptable to our shareholders”, Kyari said.

Security agencies have also monitored pipelines, Kyari said, amid what NNPC previously called “a menace of oil theft”.

Kyari’s assurance comes amid an onshore exodus in the West African country. Energy majors Eni SpA, Equinor ASA, Exxon Mobil Corp., Shell PLC and TotalEnergies SE have initiated divestments in Nigeria, mostly onshore.

“We are confident that with this same momentum and with the active collaboration of all stakeholders, especially on the security front, we can see the possibility of getting to two MMbd by the end of the year”, Kyari said.

Pius Akinyelure, chair of the NNPC board, said there are plans to further scale up national petroleum production to three MMbd.

Separately NNPC announced a 10-year agreement to supply 100 million cubic feet per day of natural gas to the Dangote refinery, with options for increase and renewal.

“The agreement represents a milestone for both NNPC Ltd and Dangote Refinery, aligning with their shared commitment to boosting local production”, NNPC said in another press release.

NNPC put online several upstream projects recently. It said May 12, 2024, it had started production at Oil Mining Lease (OML) 13 in the Niger Delta. OML 13 started up at a rate of 6,000 barrels of oil per day (bopd), expected to increase to 40,000 bopd before the end of May.

Earlier NNPC said it had put online the Madu field and restarted production in the Awoba field, adding a combined 32,000 bpd to Nigeria’s output capacity. Both are also in the Niger Delta.

Madu is expected to average 20,000 bpd, NNPC said in a news release April 19. Meanwhile, Awoba restarted production at an initial rate of 8,000 bpd, expected to scale up to as much as 12,000 bpd within a few weeks, NNPC said April 23.

On September 9, NNPC said its joint venture with Chevron Corp. is targeting to reach production of 165,000 bopd by the end of 2024 after converting their licenses under the terms of the Petroleum Industry Act (PIA). NNPC and Chevron’s local arm Chevron Nigeria Ltd. expect the conversion to “significantly boost crude oil production”, NNPC said.

The partners opted not to wait until the leases expire before converting them and instead exercised their right of voluntary conversion, NNPC said. Their five Oil Mining Licenses (OMLs) under the Petroleum Profit Tax Act (PPTA) have been converted to 26 Petroleum Mining Leases and four Petroleum Prospecting Licenses under the PIA, which was passed 2021.

“The PIA terms are generally perceived as more investor-friendly, compared to the erstwhile PPTA terms”, NNPC said.

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