Nigeria’s Oil Boom: Record Production in September 2023

The country’s crude output rose by 14 per cent from August and surpassed its previous levels this year

by Motoni Olodun
Nigeria achieved record crude oil production in Sept

Nigeria, Africa’s largest oil exporter, has achieved its highest crude oil production level this year, reaching 1.35 million barrels per day in September 2023. This is a 14 percent increase from the previous month, and a 412,000 bpd rise from the same period last year, according to the latest data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

The country’s oil output has been boosted by the efforts of the federal government and the NUPRC to curb oil theft and vandalism, which have plagued the Niger Delta region for decades. The NUPRC, established in 2022 to regulate and oversee the upstream sector, has also been working to attract more investment and innovation into the industry.

One of the key deals that the NUPRC is optimistic about is the $1.28 billion sale of Exxon Mobil’s local unit to Seplat Energy, a leading Nigerian independent oil and gas company. The deal, announced in February 2022, would give Seplat a 40 percent stake in four shallow-water licenses, increasing its oil production by almost four times to more than 130,000 bpd.

However, the deal has faced regulatory and legal hurdles, as the state-owned Nigerian National Petroleum Corporation (NNPC), which owns 60 percent of the permits, has opposed the sale and claimed it has pre-emptive rights to the assets. The NUPRC had initially rejected the deal last year but has since expressed optimism that the parties will abide by the provisions of Nigerian laws and do the right thing.

Gbenga Komolafe, the CEO of NUPRC, told Reuters on Wednesday in Cape Town at Africa Oil Week that he was hopeful that Exxon Mobil and NNPC would reach an agreement soon. He said that once Exxon had made proper arrangements with its joint-venture partners in the assets, “the regulator will do what it needs to.”

The deal is crucial for Nigeria’s oil and gas sector, which relies on petroleum for 90 percent of its foreign exchange and half its budget. Several international oil majors have been looking to sell their onshore assets in Nigeria but have faced challenges finding buyers and getting approvals.

Seplat Energy’s CEO Roger Brown said in an interview in June that his company was still interested in the assets and that he believed they were a game changer for his company. He also said he looked forward to working with President Bola Tinubu, who took office in May 2023 after defeating former President Muhammadu Buhari in a historic election.

Tinubu, seen as more business-friendly than his predecessor, has met with Exxon executives and other oil industry players since his inauguration. He has also pledged to reform NNPC and implement the long-awaited Petroleum Industry Bill, which aims to overhaul the legal and fiscal framework of the sector.

Nigeria’s oil production is still below the 1.8 million bpd cap that the Organization of Petroleum Exporting Countries (OPEC) has set for Nigeria as part of its efforts to balance the global oil market. However, with the rising demand for oil and gas post-pandemic recovery, Nigeria is poised to benefit from its abundant resources and potential opportunities.

Source: Business Insider Africa

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