By Teddy Nwanunobi
Nigeria’s oil output was hindered by operational and technical problems in July, S&P Global Platts claimed that sources close to the matter said on Monday.
The report further claimed that Bonny Light, Escravos and Forcados all faced production issues last month, while output for other key grades such as Qua Iboe, Brass River, Agbami, Akpo and Egina also remained low.
Nigerian crude and condensate output stayed stable at 1.639 million barrels per day (mbpd) in July, according to data from Nigeria’s upstream regulator, the Department of Petroleum Resources (DPR).
In June, crude production had fallen to a six-month low of 1.639 mbpd from 1.659 mbpd in May.
Pipelines feeding into Bonny Light and Forcados and other grades have faced persistent sabotage in the past few months, resulting in lower production, sources added.
July crude production inched up to 1.32 mbpd from 1.31 mbpd in June while condensate output fell to 316,237 bpd from 326,012 bpd, DPR data showed.
Nigeria’s crude oil production cap under the OPEC+ deal was 1.579 mbpd for July.
S&P Global Platts Analytics said it expects Nigerian crude supply to remain below its OPEC production quotas in the coming months due to ongoing field and pipeline issues with a downside risk to 2022 forecast if operational setbacks continue.
“We forecast (crude) supply at 1.5 million bpd in July-September,” it said in a recent note. “Supply reaches 1.8 mbpd by end-2021. Growth is threatened by fiscal stress, which may pressure amnesty payments to former militants. The last time the government curtailed amnesty payments, disruptions surpassed 600,000 bpd by mid-2016. Militant threats are also rising,” it said.
Growing threats by militants to renew attacks on oil infrastructure in the restive Niger Delta also pose a huge concern for Africa’s largest oil producer.
Output has fallen in 2021 as key fields, especially those in the Niger Delta like Bonny, Brass River, Escravos, Forcados and Qua Iboe, are pumping well below full capacity due to technical problems or maintenance.
Nigeria has the capacity to produce around 2.2 million to 2.3 mbpd of crude and condensate, but production has averaged only around 1.62 mbpd for the first seven months of 2021, according to S&P Global Platts estimates.
But production has fallen also due to Nigeria’s obligation under OPEC+ caps.