International Energy Agency slashes Nigeria’s sustainable oil production capacity
LONDON — The International Energy Agency (IEA) has cut Nigeria’s sustainable oil production by around 200,000 barrels per day (bpd), the agency said in its July report, due to ongoing technical issues. and sabotage.
The IEA estimates Nigeria’s sustainable new capacity at around 1.3 million bpd. Production in the West African country has been steadily declining since 2019, in part due to pandemic-related production cuts.
Sustainable production means that the capacity level can be reached within 90 days and remain there for an extended period.
Nigeria combined with Angola accounted for nearly 40% of OPEC+’s 2.7 million bpd production target shortfall, the IEA said.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, were targeting 43.2 million bpd in July.
Before the pandemic, Nigeria’s production fluctuated around 1.8 million bpd, but state oil company NNPC said in a monthly report that by April this year production had fallen to 1.2 million. of bpd. Nigeria was supposed to return to 1.8 million bpd by July to meet the OPEC+ target.
“Nigeria has been striving for years to stop sabotage and oil theft – but seemingly in vain,” the IEA said in its monthly report, attributing much of the shortfall to the decline in two major crude qualities.
Exports of one of Nigeria’s leading grades, Bonny Light, have fallen to negligible quantities. Shell has implemented a force majeure on exports from Bonny Light since March this year.
Industry sources, including Shell, pointed to soaring oil thefts around the 200,000 bpd mark.
Bonny Light’s infrastructure was the hardest hit, with one of its two main pipelines now empty.
The IEA estimated Bonny Light throughputs at around 30,000 bpd from 220,000 bpd in early 2021.
Forcados flows also fell to around 50,000 bpd in July, the IEA said. The rating has been hampered by delays due to creaky infrastructure and, most recently, a leak at the loading terminal on July 17, where repairs are still underway.
“In addition, Shell has closed … its EA oilfield due to a water leak in the facility. The 170,000 bpd Sea Eagle FPSO had recently pumped around 35,000 bpd,” the IEA said.
One bright spot was the start of production from TotalEnergies’ shallow water Ikike field which will add 50,000 bpd by the end of the year, the IEA said.
While Angola has also seen a steady decline in production over the past few years, unlike Nigeria, the country’s production has stabilized at just under 1.2 million bpd.
(Reporting by Julia Payne, additional reporting by Ahmad Ghaddar, editing by Jane Merriman)