Despite rise in price of oil, Nigeria’s Earnings to take a hit as production drops to 1.25m bpd

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According to the reports, Nigeria’s oil production has dropped in February to an average of 1.25 million barrels per day (bpd) from the 1.39 million previous month.

The report from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) disclosed this in its latest crude oil and condensate production data for February 2022.

In the report, it showed that the drop represented 10 percent from the January production figure — and the lowest since December 2021 when production dropped to 1.1 million barrels per day.

The figure is also lower than the 1.8 million barrels per day production quota set by the Organisation of Petroleum Exporting Countries (OPEC).

Since May 2020, Nigeria has been struggling between 1.4 million and 1.1 million bpd of oil output, causing a huge drop in monthly allocation to the federation account.

At the last meeting of the federation accounts allocation committee (FAAC), the Nigerian National Petroleum Company (NNPC) Limited did not remit any money to the federation account due to low production and provision for under-recovery (subsidy).

On Wednesday, Timipre Sylva, minister of state for petroleum resources, said poor funding in the sector as a result of the net-zero commitment and exit of oil majors affected Nigeria’s ability to hike oil output.

Sylva also cited security issues as another major factor.

Oil producers in Nigeria had also asked the federal government to tackle the menace of illegal oil bunkers, especially in the Niger Delta.

They said oil thieves are raking in ‘petrodollars’ while the country is bedevilled by low production.

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