Friday, September 16, 2022

Nigeria Drops to Africa's 4th Largest Oil Producer

Nigeria is facing a record reduction in oil production, oil cartel OPEC reports, dropping from the first largest producer in Africa to the fourth, behind Angola, Algeria and Libya.

The Organization of Petroleum Exporting Countries monthly oil market report for August showed that Nigeria's production stood at 980,000 barrels a day, a decline of more than 100,000 barrels per day compared to July.

The figure was about 50% of OPEC's target for the west African nation in August.

For decades, Nigeria has been Africa's largest oil producer. But in recent years, theft and sabotage at production sites have hampered output. Petroleum authorities say more than 200,000 barrels are lost daily as a result, and that the trend is costing the country millions of dollars in revenue.

Oil was once Nigeria's biggest earner and contributor to national GDP, but the latest data shows information and communications technology and trade contributed more during the second quarter this year.

Abuja-based oil and gas expert, Emmanuel Afimia, said he's worried about Nigeria's current situation.

"At this particular point in time when the oil prices are rising, Nigeria is supposed to sit back and be enjoying revenue and inflows of forex [foreign exchange trading] through the sales and export of crude oil. But the reverse is the case, so it's really a negative thing for the country falling from that position of being the biggest producer, Nigeria will slowly be losing its influence in the global oil market," Afimia said.

Nigerian authorities also are raising concerns. Last Friday, President Muhammadu Buhari said the situation was putting the economy in a precarious situation.

And earlier this week, Nigerian lawmakers sent a delegation to oil-rich Rivers State to investigate the problem and report back their findings to the Senate.

But oil and gas expert Faith Nwadishi said authorities must share the blame, too.

"It's a question of pointing one finger when four fingers are pointing back at you," Nwadishi said. "If government was doing enough, I don't think that we'll close our eyes and see our major source of revenue being stolen up to 90 percent. I want to see a situation where government is taking more action than crying out."

Petroleum authorities and security operatives have been working to halt the oil theft.

Raids in late August led to the arrest of more than 100 oil thieves and the recovery of millions of liters of crude oil and diesel.

Mele Kyari, head of the National Nigeria Petroleum Company, said the clampdown is making progress.

"What is most difficult to manage today and daring for us to live with is the issue of crude oil theft, [but] we're not helpless and our efforts are paying off," Kyari said.

Authorities in August awarded a pipeline surveillance contract to a former militant who once stole oil and vandalized pipelines. The move was criticized by citizens, but officials say the former militant's expertise will help prevent theft.

By Timothy Obiezu


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