Money coming into Africa’s largest economy could reduce with Nigeria’s crude oil production plunging to a record low. It has dipped to 1.24 million barrels per day last month as a result of lingering disruptions, S&P Global Platts reported .
The report quoted industry and ministry sources while saying that the country’s oil output had fallen sharply in the past few weeks due to an oil spill near the key Forcados export terminal.
Nigeria has been facing many operational and technical problems in the past few months. Key crudes such as Bonny Light, Escravos, Forcados and Qua Iboe have all faced production issues in 2021.
The country has the capacity to produce around 2.2 million to 2.3 million bpd of crude and condensate, but production has averaged around 1.50 million bpd for the first eight months of 2021, according to S&P Global Platts estimates.
Shell Petroleum Development Company declared force majeure on crude loadings of key export grade Forcados on August 13 due to ‘the curtailment of production and suspension of export operations as a result of some sheen noticed on the water around the loading buoy’.
Platts quoted sources as saying the terminal was still not fully ready for operations due to the oil spill.
It said shipping sources disclosed that the Suezmax George S. was loading a one-million-barrel cargo at the terminal on August 11 and a few days later, a sheen was noticed.
The George S. was stationed outside the terminal as of September 8, according to Platts cFlow, trade-flow analytics software.
Nigerian crude and condensate output in August fell by 6.7 per cent month on month to an average 1.53 million bpd, according to data from the Department of Petroleum Resources.
August crude production fell to 1.24 million bpd from 1.32 million bpd in July while condensate output fell to 291,300 bpd from 316,237 bpd, DPR data showed.
The decline was mainly attributed to the issues at Forcados, which slumped to 95,694 bpd in August from 218,196 bpd in July.
Nigeria’s crude oil production cap under the OPEC+ deal was 1.596 million bpd for August.
S&P Global Platts Analytics expects Nigerian crude supply to remain below its OPEC production quotas in coming months due to the disruptions, with a downside risk to 2022 forecast if operational setbacks continue.
“With Nigerian crude supply capped below 1.5 million bpd since May, averaging 100,000 bpd below OPEC+ quota, risks are clear to our forecast supply growth from 1.4 million bpd in August to over 1.7 million bpd by year-end,” Platts Analytics said in a recent note.
Growing threats by militants to renew attacks on oil infrastructure in the restive Niger Delta also pose a huge concern for the country, Africa’s largest oil producer.
