The disclosure by the Organisation of Petroleum Exporting Countries (OPEC) in its recent Monthly Oil Market Report that Nigeria’s oil production crashed is a development that has reduced Nigeria’s foreign exchange earnings as oil contribute over 75 per cent of Nigeria’s revenue.

The development is also a blow to the much anticipated ramp up of oil production as government officials and agencies had raised the hopes of Nigerians and other industry watchers that oil production would soon hit 2.million barrel per day.

Nigeria held the most increased crude oil production country of OPEC for consecutive two months of December 2023 and January 2024 but lost it to Libya in February. But its crude oil production performance became dismal in March as using direct communication, Nigeria’s oil production was 1.327mbpd in December; 1.427mbpd in January; 1.322mbpd in February and crashed to 1.231mbpd in March, an outrageous decline of 92,000b/d.

Iraq’s production declined by 89,000b/d from 3.992mbpd in February to 3.903mbpd in March; Saudi Arabia’s output declined by 39,000b/d from 9.011mbpd in February to 8.973mbpd in March whole Venezuela’s production fell by 3,000b/d from 877,000b/d in February to 874,000 b/d. Using secondary production, its production in December was 1,423; January 2024, ( 1,434); February, (1,437) and crashed to 1.398mbp in March, which is a decline of 38,000bpd.

Confirmation by NUPRC

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) later confirmed Nigeria’s dismal oil production. Data on crude drilling operations for March from the NUPRC showed that Nigeria’s oil production crashed to 1.23 million bpd in March. Industry watcher are of the opinion that Nigeria may have lost as much as 2.8 million barrels in the entire month of March, that is roughly 90,000 bpd during the period under review.

The data from NUPRC indicated that aside the nation’s crude oil production decline, condensate, which is usually outside OPEC’s quota calculation, also fell in March. Adding condensate production to oil output for March, Nigeria’s output steadily dipped from 1.64 million bpd in January to 1.53 million bpd in February and further to 1.43 million bpd in March.

Minister’s expression

The Minister of State, Petroleum Resources (Oil), Senator Heineken Lokpobiri, also confirmed Nigeria’s declining crude oil production. In a statement by his Special Adviser on Media and Communications, Nneamaka Okafor, he however, promised that measures were being taken to address the decline.

According to him, the measure will not only to restore production to previous levels but to increase and sustain it. Lokpobiri, while speaking in Lagos at the Second Quarter Dinner of Petroleum Club, with the theme, “Funding Our Way out of the Crisis: Looking up to the Oil and Gas Sector,” opined that the oil production slump was mainly as a result of issues encountered on the Trans Niger Pipeline (TNP), coupled with maintenance activities carried out by some oil companies operating in Nigeria during the period.

He lamented that Nigeria lost $34 billion in the last two and a half years due to the fall in production from the assets being divested by ExxonMobil to Seplat Energy, a transaction still awaiting approval by the federal government. According to him, the country’s output from the assets declined from 600,000 barrels per day (bpd) to current 120,000bpd, leaving a shortfall of 480,000bpd.

He stated that this amounted to $34 billion loss at a conservative $80 per barrels, in the last two and a half years. The minister said that Nigeria was producing about 600,000bpd from the ExxonMobil assets that were now under divestment, and that currently the production from the asset has reduced to about 120,000bpd.

He said that if the problem hindering the divestment process is resolved and minimal investment made on the asset, the country would be able to restore the production to 600,000bpd with the addition of 480,000bpd. According to him, in addition to condensate, which is outside the OPEC’s computation, Nigeria could deliver two million barrels per day.

He said lack of required investment in the Nigerian oil and gas industry over the past 10 years contributed to the decline in production, and warned that no oil and gas producing country treated with levity the prioritization of investment in the sector.

The minister said President Bola Tinubu had mandated him to increase oil production. He, however, said the engagement and collaboration with all the relevant industry stakeholders was imperative for the nation to ramp up its output. He also said that it was imperative to ensure sustainable investment and address the problems in the industry so that Nigeria could increase its oil production.

Lokpobiri said: “My own opinion is that, look, we are in short of 480,000 barrels a day from that ExxonMobil-Seplat transaction. “For the past two and a half years, oil has been moving around $80 a barrel. Four hundred and eighty thousand barrels a day, multiply it by two and a half years, it will give you about $34 billion. “When I was on this table, I was doing rough mathematics and I guess you have your phones. So, you can do the calculation.

If one asset was doing about 600,000 barrels, because of certain problems, which we’re trying to resolve, production declined to 120,000 barrels, which means we’ve lost about 480,000 barrels a day. “Multiply it by $80 a barrel. Every day, you’ll get about $34 million.

Multiply it by two and a half years, you’re talking about over $30 billion. If $30 billion is injected into our economy today, I guess you guys will have to sell more of your dollars because dollar will naturally drop. This exchange rate is sometimes a question of demand and supply.” He added: “If from only that Seplat-ExxonMobil transaction, we have lost about $35 billion, imagine if that money was in Nigeria.

Imagine if NNPC has about 70 per cent of that money. If they have that money to expand their investment, I believe that Nigeria will be in a better place.” The minister also said that the quickest way to address Nigeria’s economic woes was through the oil and gas sector.

For him, production growth needs to happen on sustainable basis to increase the country‘s revenue and enable the president to deliver the promises he made to Nigerians. He said: “That is my mandate. That is the mandate given to me by Mr. President. And I can assure you that this present administration is committed to ensuring that that happens.

“As a government, our own policy is to ensure that we do everything that is globally possible that other countries don’t have and that other countries are doing to attract investment, so that we can attract the desired investment. “We are willing to remove all bottlenecks in the industry because every country that has oil, prioritises investment in the oil and gas sector, and that is why as a government, the president has directed that we should resolve all problems we have in the industry.

“And that is why we are also trying to resolve the problem of OML 245, the popular Malabu oil field, because we want to attract all the investment because in my own opinion, if we don’t attract the investment, this resource we have will just be buried under the soil with no value addition.”

MEMAN

The Chief Executive Officer, Major Energies Marketing Association of Nigeria, Mr Clement Isong, in an interview with New Telegraph, decried the insufficient investments in the oil and gas sector in the country. He also lamented that the declining oil production was impacting on the nation’s revenue.

He, however, advised Nigerians not to be despondent about the declining situation, adding that it was a process which later, the country will find its feet. Isong said: “If anybody understands operations, whether in operations production, if you are trying to increase, it will go up and down while you are settling and resolving issues before it settles and starts climbing.

Anybody that want to wants to ramp anything, whether it is in manufacturing or operations, what normally happens is that things go downward when you make the decision to ramp up. If we go up and down for a while, while your initiatives are taking hold before it steadies and begins a steady climb to where ever you want it to end.

So that is where we are. “Nigeria as a country has not invested as much as it should have in growing our petroleum reserves. Now that the decision has been taken, we still need to make certain investments. There would be a period of while we stabilize, before we begin to grow the production.

That is the position where we are in. NUPRC who are in charge are identifying what can be done something in order to increase our productions. Sometime the things that are to be done is exploration, sometimes it is opening new fields, sometime it is optimizing what we already have. Some of the field that we have are not producing at their optimum level. “So there are many initiatives that are in place that are being chased.

Sometimes, you think you have chased one and you find that it did not give you as much as you had hoped. So, another initiative will give you more than you had hoped for. But for so long as you have identified that you want to increase your production and your target, I have heard N2 million, N2.5 million and N30 million.

If that is where you want to rise to, an investment has got to be made in optimising either your supply chain or your operations or bringing in new fields into the mix. That is what we are currently going through. You find that some months it goes up, in some months it goes down and then it steadies and goes up again.

We are in that phase that we are trying to ramp up. At some point in time, everything will come together and we have a steady rise until we get to our new daily production level.” He added: “I will not call what is happening now as a reduction. I will say it is that period, where we were going down before even where we reached. “We are in that period where we are trying to ramp up,. It is not one well.

There are several wells. And where one well disappoints, another well gives you more than you had expected. There Is a whole process to ramping up the collective production of the country that we are in. It is true that when it goes down, we can be less happy but if we know that we are doing all the right things and we are doing the investments in growing our reserves, which we can see we are doing and growing our production.

“At some point in time we will reach the desired production level. Let us not be despondent. The adjustment to group up requires investment. Investments are being made and investments do not bring results in a few days.it takes little time. The important thing is that it has been identified and investments and efforts are being made to push up production towards targets that are being set.”

Artificial Intelligence deployment The Permanent Secretary, Ministry of Petroleum Resources, Ambassador Nicholas Agbo Ella, said the Federal Government was working towards using Artificial Intelligence to address pipeline vandalism and crude oil theft.

He noted that AI solved complex problems in ways that are similar to human logic and reasoning. Ella in a statement by the Director of Information in the ministry, Mrs. Oluwakemi Ogunmakinwa, disclosed this in his opening remarks at a-day stakeholders’ engagement with the theme: ‘Mainstreaming Machine Learning and Artificial Intelligence into the National Petroleum Policy’, organised by the ministry in Abuja.

According to him, AI is the science and engineering of creating intelligent machines, especially intelligent computer programs that can process information and produce outcomes autonomously. He stated that it was necessary to fill up the gap that still exists in the National Petroleum Policy (NPP) by introducing or mainstreaming Machine Learning (ML) and Artificial Intelligence (AI) into National Petroleum Policy (NPP) for effective operations within Nigeria’s oil and gas industry.

Also, the Director of the Midstream and Downstream Department in the ministry Mr. Mohammed Abubakar, harped on the importance of exploring the transformative potential of advanced technologies in shaping the future of the nation’s petroleum industry. He noted that in recent years, there was a global trend of unprecedented acceleration in technological advancements, especially in artificial intelligence and machine learning.

Last word

“These cutting-edge technologies have the power to revolutionise the way we operate in the midstream and downstream sectors, from optimising supply chains and refining processes to enhancing safety and reliability in our operations. “The adoption of this technology will also help to reduce the security issues affecting the oil and gas infrastructure in our country,” Abubakar said.