Discrepancies in the figures of Nigeria’s daily crude oil production output given by people and authourities that should know are as confusing as they are laughable. It should make every Nigerian curious about the integrity of the trumpeted transparent operations and accounting for the nation’s oil proceeds. The minister of petroleum has a different figure; the NNPC has a different figure and the foreign multinational oil companies have their figures also different from those of the NNPC and the ministry. So who can give us the figure of the nation’s daily oil production with certainty?
Joke apart: how much oil does Nigeria actually produce on daily basis? This question has become imperative because if we don’t know how much oil is pumped out everyday, how can we know how much oil that leaves our shores and what we are supposed to earn as revenues from sales.
Mohammed Sanusi Barkindo, the NNPC Group Managing Director during his recent gas scouting tour to Utorogu gas plant in Delta state reportedly said the nation has been producing 2.3 million barrels of crude oil per day. This was a clear deviation from the figures the Finance Minister, the Economic Adviser to the President and the Revenue and Fiscal Mobilisation Commission claimed as the nation’s daily oil output. Nigerians were meant to believe that we were producing less than one million barrels per day because of militant attacks on oil facilities in the Niger Delta.
Though the NNPC boss did not say whether the figure he quoted was before, during, or after the spate of militant disruptions in the Niger Delta, it was very interesting to know from him that Nigeria has been pumping out 2.3 million barrels of oil on daily basis.
Meanwhile, the July OPEC production figures put Nigeria’s output at 1.67 million barrels per day; the August production volume was put at about 1.6 million barrels per day. That means we have a balance of about 700,000 bpd from the NNPC’s 2.3 mbpd.
Minister of Petroleum Resources, Rilwanu Lukman in Vienna, Austria, after the recent meeting of the Organisation of Petroleum Exporting Countries (OPEC), said “government was well ahead in achieving the 4.0 million barrels per day production target by 2010 considering the production level of 3.7 million barrels per day.
“We have achieved 3.7 million barrels per day at the moment, leaving only 300,000 barrels per day to beef it up to 4.0 million barrels per day and we have still got another year in which to do this, so we are hopeful.”
The minister’s Vienna comment was an outright contradiction to an earlier pronouncement in Uturogu Delta state by the NNPC boss. However while alluding to media reports quoting Barkindo that the country's production now stood at 2.3 million bpd, Lukman said the figure credited to the NNPC boss was inclusive of condensates production. Condensate is a light crude grade that does not fall within the OPEC quota calculation.
According to the minister, the country's crude oil production is actually between 1.5 and 1.6 million barrels per day, and condensates accounts for the balance which brings the country's daily output level to 2.3 million barrels per day.
This is very ridiculous. Does it mean the NNPC boss cannot tell the difference between crude oil and condensates in terms of production figure? And it has never been the industry practice to use daily crude oil production figures to mean both crude oil and condensates.
It is a known fact that every OPEC country produces both to meet their quota allocation and domestic needs but a situation where nobody either by outright mischief, gross negligence of statutorily assigned responsibility or outright incompetence cannot with certainty tell us how much oil we produce on daily basis is very disgraceful.
Assuming the 2.3 mbpd production figure was correct, so Nigeria has been processing in our domestic refineries about 700, 000 bpd. If this true, the minister and the NNPC boss should please tell us the fractions processed in Port Harcourt, Warri and Kaduna refineries on daily basis. Or is this balance of 700, 000 used for the NNPC’s offshore bridging in its crude -for -products swap? We need to know for accountability and further comments.
The federal lawmakers led by Hon. Igo Aguma, House Gas Committee Chairman, on August 31 unraveled serious issues of conflicting figures of the nation’s actual crude oil output. The lawmakers lamented that “We don't know how much crude we drill (produce). We don't know how much comes out. The quantity we don't know, because we don't have equipment at the well head to measure. Even at the loading bay, we don't know what is being exported daily.
“How the managers of the economy can come out with their figures that we now produce, say, 1.2 million barrels today is very suspicious. There are no reliable figures to work with. The vessels that come to load, the calibration is physical and we don’t even know how much they take away.
“That is what is still being done in Nigeria. So, we don't even know the real calibration of those vessels. All we know is that we have approved for a vessel to load 30,000 metric tonnes of crude. But we don't know if actually the capacity of the vessel is 50,000 metric tonnes.”
Though the House Committee did not directly mention the foreign multinationals, it was very clear from the statement that the greater part of the fraud was being blamed on the foreign oil firms.
The Nigeria Extractive Industries Transparency Initiative (NEITI) reiterated on Monday September 7 that “the Department of Petroleum Resources (DPR) does not measure oil output, regardless of claims by Abuja that production has now risen to 1.7 million barrels per day.”
The reason is that the DPR is terribly handicapped to check anything other than collect the figures given by the multinational operators.
Interestingly, both the Ministry of Petroleum Resources (DPR) and the Nigerian National Petroleum Corporation (NNPC) subsidiary- NAPIMS that were supposed to be the industry regulator and government’s accountant respectively in the nation’s oil business rely only on terminal receipts to measure production outputs. This is very interesting because it all means that we only rely on the volume of crude oil sent to the terminals to measure the nation’s daily output. And this raises very serious questions of transparency or rather sincerity by both the foreign multinationals and the Nigerian DPR and NNPC.
To continue to hide under the guise of militant disruptions to mark-down our daily production can no longer be acceptable. After all, all these noise about production shut-in in the Niger Delta could rightly be said to just be an onshore/swamp phenomenon that adversely affected just few producing companies like Shell and maybe NAOC. The case of Chevron is very peculiar because of its location (near shore) near the epicenter of the agitation in Delta state.
So what has been happening to other producers particular those whose production operations could rightly be adjudged to be mainly offshore (near and deep) and were not by any means affected by the crisis in the Niger Delta? Majority of them also use the Floating Production and Supply Operation (FPSO) in their offshore oil production. FPSO means that all the active (producing) oil wells in a field are stringed into a floating production platform where they are stored and from where oil tankers (vessels) load directly to overseas without coming to any of the existing terminals in Ibeno near Eket, Brass, Bonny or Forcados.
How much oil do we pump out from all the offshore fields that are stringed to floating production and supply facilities and who does the calibration and fiscalisation in some of these facilities- DPR and NNPC (NAPIMS) or the foreign multinationals themselves?
There are so many issues to investigate and almost all are purely technical and there seems to be a deliberate manipulation of our national interests in the oil sector by the foreign multinationals in collaboration with few evil-minded Nigerians. It is very pathetic that the nation’s oil regulating agencies in addition to endemic corruption are zero equipped technically to police the foreign oil firms especially in difficult terrains such as the offshore arena. Mr President should consider this point maybe to upgrade as the eighth point in his list of agenda.
IFEANYI IZEZE IS AN ABUJA-BASED CONSULTANT ([email protected])
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