Nigeria’s Oil Production Drops

Nigeria’s Oil Production Drops
Petroleum, arrow down

Nigerian oil production has dropped to 1.4mb/d due to attacks by armed militant groups, the Nigerian Oil Minister,  Ibe Kachikwu, declared, Argus Media reported. Nigerian output has improved to 1.75mb/d in July, up from 1.69mb/d a month earlier; however, it still remains the lowest rate. Minister Kachikwu stated that this is the lowest production rate Nigeria has witnessed since 1989

Attacks against oil and gas sectors since February 2016 has led to a series of force majeure on Nigerian crude, including key export grade Forcados. Nigeria is currently collaborating with local communities to solve the problem.

Furthermore, As Nigeria has been unable to sufficiently fund cash-call obligations of the state-owned Nigerian National Petroleum Corporation (NNPC) for years, leading to delays in new upstream projects, it ponders changing the procedures to be supported by the foreign joint venture partners such as Shell, Total, Italy’s Eni, Chevron and ExxonMobil. The NNPC owes over $6b to these companies. In addition, the cost of meeting its majority stake in these ventures is over $2b per year.

Meanwhile, the NNPC aims to enhance its refinery operations – most recently in cooperation with Spain – in order to decrease imports of refined products by 60% by 2018 and end all imports by 2020.


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