News
18/02/25
Nigeria cuts oil theft, upbeat on output growth plan
Lagos, 18 February (Argus) — Nigeria's upstream regulator NUPRC said losses from
oil theft have fallen to just 5,000 b/d, down from 15,000 b/d in August of last
year. At its peak in 2018, theft was costing Nigeria as much as 150,000 b/d,
according to the Nigeria Extractive Industries Transparency Initiative.
Sustained security interventions by the government have been successful in
tackling the problem, said NUPRC chief executive Gbenga Komolafe. "Oil theft has
significantly reduced to 5,000 b/d, leading to a steady [liquids] production
increase to 1.7mn b/d," he added. State-owned oil firm NNPC said security
measures have led to around 1,861 illegal connections being removed from
pipelines, while 677 points of vandalism were found and fixed over the past 12
months. About 4,124 illegal refineries and 1,897 boats laden with stolen crude
were also destroyed within the same period, NNPC said. NUPRC said last year that
a forensic study showed 40pc of losses previously attributed to theft in 2020–22
were caused by metering inaccuracies. In July last year, the regulator launched
an audit of Nigeria's 187 upstream flow stations to determine where meters are
outdated or broken and which designated measurement points lack the required
equipment. The audit was to have been completed by November 2024 but an NUPRC
source told Argus that it is only being completed now. Komolafe also said a
programme that aims to add 1.07mn b/d to Nigeria's liquids output by December
2026 is on track. The ambitious initiative aims to leverage "collaboration among
operators, service providers, financiers and host communities", Komolafe said.
The programme forecasts an injection of $1.45bn of capital into Nigerian oil
blocks under joint venture agreements, $1.11bn into blocks under
production-sharing contracts and $650mn into blocks under sole risk contracts.
This investment will respectively yield additional output of 470,800 b/d,
224,700 b/d and 374,500 b/d, according to NUPRC. Nigeria has struggled with
mobilising upstream investment in the past and has consistenly fallen short of
less ambitious production growth targets in recent years. But an NUPRC source
told Argus that easy wins are possible under the latest output growth programme,
including 42,800 b/d from restarting shut-in wells, 74,900 b/d from the ramp-up
of fields recently brought online, 96,300 b/d from drilling new wells and
256,800 b/d from well re-entry. The chief executive of local operator Heirs
Energies, Osayande Igiehon, said his company restarted 40 shut-in wells in oil
block OML 17, which the company operates with a 45pc stake in a joint venture
with NNPC, between the third quarter of last year and 11 February this year.
Production has risen to 55,000 b/d, up from 35,000 b/d in January of last year,
he said. Nigeria has "the infrastructure in place to deliver up to 2mn b/d, more
than 2mn b/d, but a lot of it is shut in, is closed in or is poorly worked,"
Igiehon said. "Beyond 2mn b/d, we need to do a lot of greenfield investments
onshore, in shallow water and in the deep water, investments that will take a
longer gestation period," he said. NUPRC data show Nigeria's liquids production
rose by 4pc on the month to 1.74mn b/d in January, of which 1.54mn b/d was
crude, leaving the country 2.6pc above its Opec+ quota. Argus estimates put
Nigeria's January crude production lower, at 1.51mn b/d . Nigeria's junior oil
minister Heineken Lokpobiri said the government expects a significant portion of
the country's targeted oil output growth will be condensate. The government is
considering infrastructure interventions to reduce the co-mingling of crude and
condensate, further separation of condensate streams from crude streams in
transportation and storage, and to increase marketing of Nigerian output as
condensate. By Adebiyi Olusolape Send comments and request more information at
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