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Nigeria Slips to Fourth on Africa’s Biggest Oil Producers’ List

Nigeria, the giant of Africa is no longer giant, as crude oil production drops below Angola, Libya and Algeria in the month of September 2022, according to OPEC’s latest report.

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Nigeria, the giant of Africa is no longer giant, as crude oil production drops below Angola, Libya and Algeria in the month of September 2022, according to OPEC’s latest report.

The Organization of Petroleum Exporting Countries (OPEC) on Wednesday shows that Nigeria has now dropped to the fourth position on Africa’s biggest oil producers list.

According to the OPEC report, Angola maintains its position as Africa’s biggest oil producer. The report noted that Angola produced 1.18 million barrels per day in September 2022 while Libya followed with 1.152 million barrels per day. 

Algeria came third with a daily production of 1.04 barrels while Nigeria which held Africa’s biggest oil producer’s crown for the last five years dropped to the fourth position with less than 1 million barrels per day.

Investors King had earlier reported that Nigeria lost its status as Africa’s biggest crude oil producer to Angola. Analysts attribute the decline in production to oil theft and vandalism. Recently, a joint patrol of the navy and the civilian JTF has discovered several illegal tappings along the crude oil pipelines.

One of the illegal tapping points is a 4 kilometres long pipeline which the Nigerian National Petroleum Company Limited (NNPCL) said might have been in existence for almost 9 years.

The massive oil thief and disruption in production which is due to vandalism has sent some major oil companies out of Nigerian operation. 

For instance, in August 2022, after TotalEnergies announced the plan to sell its stake in a Nigerian oil joint venture, the company decided to invest about $850 million in oil projects in Angola.

Meanwhile, Nigerian National Petroleum Corporation Limited has disclosed that the country’s oil production capacity will increase by almost 500,000 barrels per day once the Forcados Terminal and the Trans-Niger pipelines resume operation.

According to the Group Chief Executive Officer (GCEO) of NNPC Limited, Mr Mele Kyari, the long-term closed Trans Niger Pipeline and the Forcados oil terminal are expected to add about 500,000 barrels per day to Nigeria’s crude oil output.

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Crude Oil Dips Slightly on Friday Amid Demand Concerns

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On Friday, global crude oil prices experienced a slight dip, primarily attributed to mounting concerns surrounding demand despite signs of a tightening market.

Brent crude prices edged lower, nearing $83 per barrel, following a recent uptick of 1.6% over two consecutive sessions.

Similarly, West Texas Intermediate (WTI) crude hovered around $78 per barrel. Despite the dip, market indicators suggest a relatively robust market, with US crude inventories expanding less than anticipated in the previous week.

The oil market finds itself amidst a complex dynamic, balancing optimistic signals such as reduced OPEC+ output and heightened tensions in the Middle East against persistent worries about Chinese demand, particularly as the nation grapples with economic challenges.

This delicate equilibrium has led oil futures to mirror the oscillations of broader stock markets, underscoring the interconnectedness of global economic factors.

Analysts, including Michael Tran from RBC Capital Markets LLC, highlight the recurring theme of robust oil demand juxtaposed with concerning Chinese macroeconomic data, contributing to market volatility.

Also, recent attacks on commercial shipping in the Red Sea by Houthi militants have added a risk premium to oil futures, reflecting geopolitical uncertainties beyond immediate demand-supply dynamics.

While US crude inventories saw a slight rise, they remain below seasonal averages, indicating some resilience in the market despite prevailing uncertainties.

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Nigeria’s Oil Rig Count Soars From 11 to 30, Says NUPRC CEO

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The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, has announced a surge in the country’s oil rig count.

Komolafe disclosed that Nigeria’s oil rigs have escalated from 11 to 30, a substantial increase since 2011.

Attributing this surge to concerted efforts by NUPRC and other governmental stakeholders, Komolafe highlighted the importance of instilling confidence, certainty, and predictability in the oil and gas industry.

He explained the pivotal role of the recently implemented Petroleum Industry Act (PIA), which has spurred significant capital expenditure amounting to billions of dollars over the past two and a half years.

Speaking in Lagos after receiving The Sun Award, Komolafe underscored the effective discharge of NUPRC’s statutory mandate, which has contributed to the success stories witnessed in the sector.

The surge in Nigeria’s oil rig count signifies a tangible measure of vibrant activities within the upstream oil and gas sector, reflecting increased drilling activity and heightened industry dynamism.

Also, Komolafe noted that NUPRC has issued over 17 regulations aimed at enhancing certainty and predictability in industry operations, aligning with the objectives outlined in the PIA.

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Oil Prices Rebound in Asian Markets Amid Red Sea Shipping Concerns

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Amid escalating attacks on shipping in the Red Sea and growing uncertainty regarding U.S. interest rate cuts, oil prices rebounded in Asian markets today.

Brent crude oil, against which Nigerian oil is priced, climbed by 24 cents to $82.58 a barrel while the U.S. West Texas Intermediate crude oil (WTI) rose by 21 cents to $77.25.

The rebound comes after both Brent and WTI contracts experienced a 1.5% and 1.4% decline, respectively, from their near three-week highs on Tuesday.

This decline occurred as the premium for prompt U.S. crude futures to the second-month contract widened to $1.71 a barrel, its widest level in approximately four months.

However, on Wednesday, the premiums slid to 4 cents a barrel.

Analysts suggest that oil futures have entered a relatively range-bound phase, with current prices reflecting a risk premium of $6-7 per barrel.

The situation could persist until the next significant development in the Gaza crisis, whether it involves a de-escalation through a ceasefire or a further intensification of the conflict.

Recent attacks on vessels in the Red Sea and Bab al-Mandab strait by Yemen’s Iran-aligned Houthis have heightened concerns over freight flows through these critical waterways.

Moreover, Washington’s veto of a draft UN Security Council resolution on the Israel-Hamas war has added to geopolitical tensions impacting oil markets.

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