17 April 2015, Lagos – Still smarting from the plunge in revenue, Nigeria saw the highest drop in crude oil production in March among its peers in the Organisation of Petroleum Exporting Countries, the latest monthly report from the 12-member oil cartel has shown.
The report, which was released on Thursday, put oil output from Nigeria at 1.67 million barrels per day in March, down from 1.80 million bpd in February, based on direct communication. The country pumped 1.96 million bpd in January.
Four other OPEC members, Algeria, Angola, United Arab Emirates and Venezuela, recorded declines in production, while the rest (excluding Kuwait whose production remained unchanged), led by Saudi Arabia, saw an increase.
Crude oil production from Algeria, Angola, UAE and Venezuela fell to 1.12 million bpd (from 1.13 million in February), 1.75 million (from 1.79 million), 2.91 million (from 2.98 million) and 2.73 million (from 2.74 million), respectively, based on direct communication.
Nigeria, Africa’s top oil producer, also saw the second-largest drop in rig count after Venezuela in March, data from Baker Hughes Incorporated and OPEC’s estimates showed.
Rig count, which is largely a reflection of the level of exploration, development and production activities occurring in the oil and gas sector, dropped to 32 in Nigeria last month from 36 in February and 38 in January.
The PUNCH had on March 19 reported that the number of rigs in the country looked set to decline further amid the plunge in global oil prices, which had taken a huge toll on companies’ capital expenditures on exploration and production.
Nigeria has the second largest amount of proven crude oil reserves in Africa, but reserve estimates have been stagnant as exploration activities have been low, the United States Energy Information Administration noted in its ‘Nigeria Brief’.
It said rising security problems coupled with regulatory uncertainty had contributed to decreased exploration activities.
In March, the global benchmark Brent and United States’ West Texas Intermediate crude oil futures ended lower amid a growing glut, storage constraints in the US, and the US dollar rising to fresh highs earlier in the month.
OPEC said, “Signs of higher output in the United States also pressured the market. Global crude prices struggled to find a bottom over the month as initial fears that a 60 per cent price drop since June was excessive were later offset by growing oil production.
”Slowing growth in China’s economy as well as high US production have contributed to a global surplus in oil supplies. Meanwhile, the rally in the dollar in the first half of the month brought further pressure on dollar-denominated commodities, making them more expensive to holders of the euro and other currencies.”