Nigeria’s output of crude oil and condensate averaged 1.676 million bpd in March, down by more than 200,000 bpd compared to the February average production of 1.9 million bpd according to reports from Nigeria’s petroleum ministry.
In the absence of any significant reports of oil infrastructure sabotages that could have explained force majeure loss of production, the decline has been attributed to turnaround maintenance at the Bonga deepwater field whose output is somewhere between 150,000 bpd and 200,000 bpd. Last month, Shell Nigeria said that the turnaround maintenance at the Bonga field began on March 4, and the plan was to successfully conclude the ramp of activities and resume production as planned in April.
Since the end of last year, Nigerian production has been gradually recovering as militant attacks have subsided, to the point that voices were raised that the country may have to join OPEC’s output cuts—from which it is currently exempt due to said militant violence—in case it manages to almost fully restore its production.
Still, one of Nigeria’s main export grades, Forcados—averaging around 250,000 bpd of output—is still under force majeure. Nigerian officials told Platts early last month that Forcados is expected to come online again sometime in the second quarter of this year.
For June this year, Nigeria’s Petroleum Minister Emmanuel Kachikwu has set a production goal of 1.9 million bpd of crude oil and another 300,000 bpd of condensates, for a total 2.2 million bpd output.
Nigeria is currently exempt from the OPEC production cuts because of the issues it is facing with militancy in the oil rich Niger Delta.
The OPEC deal calls for the producer group to lower output by some 1.2 million b/d from October levels and freeze production at around 32.5 million b/d, while exempting Libya and Nigeria from any cuts.
The six-month deal, which expires in June, will be up for review at OPEC’s next meeting on May 25, with some ministers saying the production cuts should be extended to continue drawing down global inventories.
Sources have said that with Nigeria restoring output, it could be asked to join the output cuts, if the deal is extended.
In late November oil minister Emmanuel Kachikwu acknowledged that a fully recovered Nigeria would likely be asked to share in the cuts.
“I don’t expect that once you reach your volume you are going to have free rein, so we probably have six months to get our act together and then hopefully zoom back out production and then we will be asked to contribute,” Kachikwu told reporters. “That is what I imagine.”
The Trans Forcados pipeline is expected to re-open by the end of June, officials from pipeline operator Nigerian Petroleum Development Co. said earlier this year.
Sources have said producers in the region are keen to start exports from the main Forcados terminal as soon as possible, but the government remains cautious due to the fragile security situation.
Nigerian oil output plummeted to near 30-year lows of around 1.2 million b/d in May 2016 from 2.2 million b/d earlier in the year as attacks on oil facilities in the Niger Delta rose at an alarming pace due to resurgent militancy.
Nigerian oil production still remains sharply below its capacity of 2.2 million b/d, with the main export grade Forcados still shut in. But Nigerian oil output has recovered gradually this year as militant attacks have fallen substantially since early January after the government stepped up peace talks with leaders and youths in the Niger Delta to end militancy in the region.