…As OPEC, oil traders dispute NNPCL’s figures
Nigeria’s actual crude oil production figures are far above the official figures declared monthly by the supervising ministry and the two agencies saddled with the task of overseeing the nation’s upstream oil and gas sector, Business Hallmark findings have revealed.
Month after month, the trio of Ministry of Petroleum Resources, Nigerian National Petroleum Company Limited (NNPCL) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) have officially supplied Nigeria’s daily and monthly crude oil production figures to the Organisation of Petroleum Exporting Countries (OPEC) as statutorily required.
However, the monthly figures, apart from lacking details, are full of discrepancies, fueling fears of corruption and underhand tactics by officials involved in the computation.
For instance, based on the data supplied to OPEC by NUPRC, Nigeria’s oil production figures, excluding condensates, stood at 1.427 barrels per day (mbpd) on average in January, 1.322mbpd in February, 1.23mbpd in March, 1.28mpbd in April and 1.25mpbd in May.
However, according to secondary sources, Nigeria’s oil production output stand at 1.419mbpd on average in January, 1.476mbpd in February, 1.39mbpd in March, 1.35mpbd in April and 1.41mbpd in May. The report for June 2024 is yet to he released.
NUPRC’s figures of Nigeria’s monthly oil production in the first five months of 2024, when compared to the ones tracked by secondary sources, Nigeria produced 8,000bpd lower than what was declared to OPEC in January. In February, March, April and May of 2024, Nigeria produced 15,000, 17,000, 7,000 and 16,000 bpd consecutively more than what was reported to OPEC, according to secondary sources and the oil cartel itself.
Stakeholders in the oil and gas industry, especially OPEC, gather data on crude oil production from two sources: direct communication from oil producing countries and secondary communication from export terminals, oil traders, commodities exchanges, shipping and insurance firms and energy intelligence platforms like Vitoil, Trafigura, Glencore, Cargill, Mercurial, Bloomberg, Wood Mackenzie, Platts, Argus, Lloyd’s, AEGIS, among many others.
Some experts in the nation’s oil and gas industry, who spoke to our correspondent on the matter, claimed that the practice of under reporting their actual crude oil production by OPEC member countries is far more pronounced than widely reported.
According to an expert, countries under declare their actual oil production for several reasons.
“Your findings didn’t come as a surprise to me. It is an open secret in the oil and gas industry that most OPEC members under-declare their actual production figures in a bid to circumvent the cap put on their production by the oil cartel meant to influence the prices of oil in the international market.
“It simply shows that more crude is being produced and clandestinely pushed into the oil market by producing nations”, he stated.
Also, a geologist with an oil servicing firm in Port Harcourt, Dr. Segun Jaiyeola, explained that, “Technology has made it easy to track every transaction. Traders know the amount of oil they buy. These crude are purchased using banks instruments, which are filled. They must transport it through shipping lines, which keep records. And before you can put them on the sea, they must be insured by competent firms. Borders controls at receiving ports or land borders also do their own inspections with documents.
“By and large, apart from crude products kept for local use by producing countries, virtually every barrel of crude shipped abroad can be tracked.
“So, let the NNPC and NUPRC continue to give whatever figures they want, the world knows our actual production figures”.
Another oil expert, Ronald Duncan, who reports for Engel, an international energy news site focusing on oil and gas and alternative energy, said data gotten from energy intelligence platforms are more reliable than those supplied by oil producing nations like Nigeria. According to him, accurate data in Nigeria and most developing countries are difficult to come by and cannot be relied on.
A Nigerian stakeholder in the upstream oil and gas sector, who did not want his identity disclosed, told newsmen that a large chunk of crude oil produced in Nigeria are not accounted for. According to him, apart from crude that passes through the nation’s official export terminals, products retained for local use, as well as those taken directly from flow stations with the active collaboration of collaborating foreign firms are very difficult to track.
Also, a recent article, titled: “The Impediments to Nigeria Understanding Oil Production Volumes, Losses and Potential Solutions”, co-authored by Messrs Sidikat Modupe Ibrahim, Paul Bills, John Allport and Radu Racasan, says the issue of the quantity of oil produced or missing has traditionally been played down in Nigeria.
“This is evident as no one in or outside Nigeria is able to quote a totally reliable production volume or loss figure”, the report noted.
