Nigeria’s crude oil production rose to 1.258 million barrels per day (bpd) in January 2023 representing a 1.9% increase from the 1.235 million barrels per day produced in December 2022. The number also signifies the highest level of Nigeria’s crude oil production in a year, as compared to January 2022 when oil production was at 1.39 million bpd.
Including condensates, crude oil production in January 2023 amounted to 1.494 million bpd, which was an increase from 1.414 million bpd in December 2022. Condensate is a blend of lightweight liquid hydrocarbons that resemble high-API crude oil. Typically, it is extracted from a natural gas stream during production (known as field separation) when the gas is subjected to atmospheric conditions causing a drop in temperature and pressure.
Even though Nigeria’s crude oil production went up by 22,833 thousand barrels per day in January 2023, it is still below both its OPEC production quota of 1.83 million bpd and the 2023 budget production target of 1.69 million bpd. While the 2023 budget is based on an oil price of $75, the brent crude price averaged $82.5 per barrel in January 2023. Nonetheless, the current oil output remains significantly below the production objective set for the 2023 budget.
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Earlier in January, the CEO of NNPC Limited, Mele Kolo Kyari had asserted that Nigeria’s oil output including condensates could hit 2.2 million bpd in 2023. Also, in November 2022, The Minister of State for Petroleum Resources, Timipre Sylva, stated that Nigeria should be capable of satisfying the production quota established by OPEC by May 2023.
While the prospects of Nigeria increasing its oil output are significant, the country is making strides to increase its oil reserves. Toward the end of 2022, NNPCL declared notable oil and gas findings in Bauchi, Gombe, and Nassarawa States, signifying Nigeria’s first-ever oil discovery in the North.
The OPEC Monthly Oil Market Report (MOMR) states that in January 2023, Nigeria and Angola played a part in boosting crude oil production for OPEC-13 members. While Nigeria contributed an increase of 22,833 bpd, Angola’s oil output increased from 1.088 million bpd in December 2022 to 1.105 million bpd in January 2023. As per the report, the combined crude oil production of OPEC-13 members in January 2023 averaged 28.88 million bpd, indicating a drop of 49 thousand barrels per day in comparison to December 2022.
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The report links the growth of oil demand in 2023 to China’s ability to recover from the mobility restrictions it had imposed. However, there are apprehensions about the extent and speed of the country’s economic revival and the resulting influence on oil demand.
Away from the OPEC report, the IEA Oil Market Report for January 2023 predicts growth in oil demand in 2023 to 101.7 million bpd. The report also links this growth to the lifting of COVID restrictions in China.
