Libya Overtakes Nigeria as Oil Output Hits Eight-Month Low
In a surprising turn of events, Libya has surpassed Nigeria to become the leading crude oil producer in Africa for the month of March, according to the latest figures released by the Organization of Petroleum Exporting Countries (OPEC). The data, contained in the April 2024 Monthly Oil Market Report (MOMR), highlights significant movements within the continent’s oil production landscape.
The report details that Libya’s crude production reached 1.24 million barrels per day (bpd) in March, marking a 5.7% increase from its February production levels of 1.17 million bpd. This advancement places it ahead of Nigeria, which saw its output fall to 1.23 million bpd in March from 1.32 million bpd in February. This decline represents Nigeria’s lowest production rate since July 2023, shedding light on a series of challenges faced by the country’s oil sector.
These challenges include limited infrastructure capabilities, frequent security breaches within oil-producing regions, and operational issues that have collectively hampered Nigeria’s oil output. Notably, large-scale oil theft has emerged as a critical concern, significantly impacting government revenues and constraining the nation’s oil production and export capabilities.
Jide Pratt, a country manager at Trade Grid and an energy analyst, emphasized the severity of these challenges. “We aren’t curbing oil theft nor are we optimizing our wells effectively,” he expressed, highlighting the need for Nigeria to adopt successful strategies from other oil-producing nations to enhance its production.
In response to the escalating issue of oil theft, the Nigerian National Petroleum Company Limited (NNPC Ltd) has reached out to the Economic and Financial Crimes Commission (EFCC) for assistance. Mele Kyari, the Group Chief Executive Officer of NNPC Ltd, emphasized the significance of the challenge during an interactive session in Abuja, appealing for support to tackle what he described as the most significant economic crime in Nigeria.
In addition to seeking external assistance, NNPC Ltd has implemented measures to combat crude oil theft and pipeline vandalism. This includes the launch of an application aimed at monitoring these criminal activities and the awarding of a surveillance contract to a former leader of the Movement for the Emancipation of Niger Delta, Government Ekpemupolo, in a bid to safeguard the nation’s oil infrastructure.
Despite these efforts, Nigeria’s oil sector continues to face losses due to the pervasive issue of vandalism, a factor that has compelled several international oil companies to transition from onshore to offshore operations. The decrease in Nigeria’s crude production also aligns with production cuts enforced by OPEC and its allies, including Russia, as part of a broader strategy to stabilize global oil markets and support prices.
The OPEC+ group, led by Saudi Arabia, is closely monitoring the situation to ensure compliance with agreed production quotas, in an effort to maintain equilibrium in the oil markets and sustain economic viability for its member countries.
