Deepwater Performance Most Responsible for Nigeria’s March 2024 Output Decline - Africa’s premier report on the oil, gas and energy landscape.

Deepwater Performance Most Responsible for Nigeria’s March 2024 Output Decline

By the Editorial Desk of Africa Oil+Gas Report

Nigeria’s seven deepwater fields output an average of 415,392Barrels of Oil Per Day, in March 2024, one of the lowest performances in the last three years.

The 56,575BOPD decrease in deepwater output from the February to March 2024, represents 62% of the country’s total output drop (91,690BOPD) from 1,322,208BOPD to 1,230,518BOPD.

Data released by the Nigerian Upstream Regulatory Commission (NUPRC) indicates that Shell’s Bonga field, which is also the country’s flagship deepwater asset, led the decline by dropping from 124,115BOPD to 95,363BOPD, a 28,752BOPD plunge, representing 31% of the total output drop. TOTAL’s (deepwater) Akpo field shed 17,000BOPD, or 18% of the output gap between February and March 2024.

NUPRC data doesn’t highlight field specific activities, but it is clear that eastern onshore fields, whose crudes are evacuated by the Shell operated Bonny Terminal, are still struggling. Crude receipts at the Bonny Terminal declined by 21,324BOPD, in March 2024, compared with February 2024. In the western Niger Delta, the Chevron operated Escravos Terminal witnessed a small increase in receipts of crude of around 2,000BOPD, from 127,046BOPD in February to 129,442BOPD in March, while the Shell operated Forcados terminal saw an 18,000BOPD decline in receipts month on month.

Basic operational challenges and routine field decline and maintenance, it would seem, played a higher role than the “usual suspects” of vandalism and crude oil theft and pipeline infrastructure, which should have been factored in by now when considering overall crude oil output.

There is no remarkable increase in shallow water production, as indicated by the figures at the ExxonMobil’s Qua Iboe and Yoho Terminals as well as TOTAL’s Odudu, which mostly receive crudes from shallow water fields. Nigerian independent shallow water operators have not yet picked up the slack here, though work is going on in both the Anyala- Madu cluster (First E&P) and Okwok field (Oriental Energy) for the one to increase output and the other to bring new field into production.

The country’s authorities have reached out to the oil majors to invest more in new deepwater developments and a key part of the executive orders on oil and gas reforms signed by President Bola Tinubu in March 2024 addresses this issue with fiscal incentives. But the existing deepwater fields will continue their inexorable decline while any new deepwater field development (like Shell’s Bonga North, being considered for Final Investment Decision by July 2024), is unlikely to each the market before 2027.

The quickest wins remain onshore and in shallow water.

-A public service commentary of Africa Oil+Gas Report.

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