Nigeria remains Africa’s biggest oil producer

Nigeria is Africa’s top crude oil producer for March 2023, despite recording lower production during the month under review.

According to the Monthly Oil Market Report released earlier today by the Organization of Petroleum Exporting Countries (OPEC), Nigeria recorded a 1.2 million barrels per day production rate in March 2023.

OPEC said Nigeria had the highest crude production in the month under review, followed by Algeria which recorded 1 million barrels per day. Meanwhile, Angola recorded 972,000 barrels per day.

Previous data from the Nigerian Upstream Regulatory Commission (NUPRC) showed that Nigeria’s crude oil production for March was the lowest recorded since the start of the year 2023.

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According to NUPRC data, Nigeria was only able to pump 1,268,202 barrels per day of crude oil. During the same period, the country produced 63,756 blended condensates and 185,469 unblended condensates, making a total of 1,517,426 for the period highlighted.

In the MOMR from OPEC, total OPEC-13 crude oil production averaged 28.80 million barrels per day in March 2023, lower by 86,000 barrels per day month-on-month. OPEC stated that crude oil output increased mainly in Saudi Arabia, while production in Angola, Iraq and Nigeria declined in March 2023.

The MOMR also stated that in the first quarter of 2023, world oil demand is estimated to have grown by a healthy 2.1 million barrels per day year-on-year on the back of a strong rebound in China’s oil demand, as well as solid oil demand data in other non-OECD regions, particularly the Middle East and Asia.

However, looking ahead, world oil demand is expected to grow by around 2.4 million barrels per day year-on-year in the second quarter of 2023, 2.5 million barrels per day year-on-year in the third quarter of 2023 and 2.3 million barrels per day year-on-year in the fourth quarter of 2023.

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Despite pledges by the Nigerian National Petroleum Company (NNPC) Limited, the country has not been able to reach its OPEC quota of 1.8 million barrels per day or even its 2023 budget benchmark of 1.6 million barrels per day. This is because of certain challenges – lack of investments, economic, political and security risks, continuous crude production sabotage as well as the shift to renewable energy which has prompted many financial institutions and firms to abandon fossil fuel projects.

Already, economic analysts believe that the current situation could be long-term, despite efforts to reverse the trend. In its April 2023 Africa’s Pulse Report, the World Bank said that the Nigerian economy is set to grow by 2.8% in 2023, down from 3.3% in 2022, while oil production will remain subdued in 2023. A part of the report stated:

“Growth will continue to be driven by services, trade, construction, manufacturing, and agriculture. Oil production is projected to remain subdued in 2023, because of inefficiencies and insecurity, and recover slightly in 2024– 25. On the production side, growth in 2023 will be supported by industry (with a growth of 5.6%) with the mega-refinery project.

Nigeria’s oil production has faced some challenges in recent years due to various factors such as pipeline vandalism, security concerns, and technical issues. However, despite these challenges, the country has remained a significant producer of crude oil.

However, fluctuations in production levels can have a significant impact on the country’s economy and overall development.