Oil production in Nigeria remained on an upward swing despite an increase in sabotage attacks on production facilities, Nigerian National Petroleum Corporation revealed. Nigeria’s oil production hovered around 2.2 million b/d in the first week of August, according to S&P Global Platts, compared with around 1.92 million b/d a year ago.
The latest monthly data from the NNPC showed that average production for the month of May peaked at 1.94mbpd. Nigeria’s crude and condensate production have risen sharply in the past six months due to the start-up of the 205,000 b/d deepwater Egina field which came online December 29. The country pumped 2.1 million b/d and 2.05 million b/d of crude and condensate in June and July respectively, based on Platts estimates.
The steady growth in oil production was being threatened by the increase in attacks on oil pipelines.
Nigerian National Petroleum Corporation recorded a 77 per cent increase in cases of oil pipeline vandalism in its network of pipeline infrastructure in June 2019,” he said, adding that the company was collaborating with government security agencies to secure the pipelines and other production facilities.
NNPC warned last week that escalating production costs due in part to security issues posed a serious challenge to Nigeria’s bid to boost its oil output and reserves.
The companies, under the umbrella body of the Oil Producers’ Trade Group of the Lagos Chamber of Commerce and Industry, said high costs were a major disincentive to investing in new projects.
“Nigeria ranks amongst the top 10 countries with the highest cost of producing oil and gas equivalents per barrel. Security costs are escalating as peculiarities of the business environment require additional resources be deployed to secure our people and assets,” chairman of the group Paul McGrath said at an industry event last week.
Nigeria is aiming to sharply increase its crude oil production to 3 million b/d and reserves to 40 billion barrels by 2023, from around 2 million b/d and 37 billion barrels now.