Following an unforeseen decline in April, Nigeria’s oil production experienced a growth of 14.4% in May, averaging 1.43 million barrels per day, as per the latest data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The production figures encompassed crude oil (1.18m barrels), blended condensate (0.065m barrels), and unblended condensate (0.18m barrels). However, the data indicates that the country continues to fall significantly below the assigned quota of 1.8 million daily productions by the Organization of Petroleum Exporting Countries (OPEC) and the benchmark of 1.69 million barrels per day set for the 2023 Federal Government’s budget.
Persistent insecurity, pipeline vandalism, and oil theft in the Niger Delta region have hindered oil production.
These latest statistics have sparked a debate over the accuracy of Nigeria’s oil production measurement system. The Nigeria Extractive Industries Transparency Initiative (NEITI) has asserted that the country lacks precise knowledge of the exact volume of crude oil produced by the industry.
Dr. Orji Ogbonnaya Orji, the Executive Secretary of NEITI, stated that the government could only estimate the volume of crude oil produced without a precise measurement mechanism. NEITI has been advocating for an agency to collaborate with them in addressing this issue.
According to NEITI reports, from 2009 to 2020, Nigeria lost 619.7 million barrels of crude oil, equivalent to $46.16 billion or N16.25 trillion at the official exchange rate. This loss occurred either through theft or unaccounted discrepancies.
Addressing these concerns, Engr. Gbenga Komolafe, the Chief Executive of NUPRC, emphasized that the commission is addressing the challenge through a new oil production measurement guideline. The commission recently disclosed that inaccurate measurement of production volume accounts for 40% of the reported annual crude oil theft, which amounts to over $4 billion.
Engr. Komolafe highlighted that the new Petroleum Measurement Regulations of 2023 will promote the deployment of meters in upstream petroleum operations, encourage competition and independence in metering services, attract private investment in metering, ensure accurate measurement for revenue calculation, and establish requirements for the design, operation, and maintenance of metering equipment in the upstream sector.