Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) shows that Nigeria’s crude oil production increased by 4% m/m to 1.55 million barrels per day (mbpd). The total output includes condensates of around 241k bpd. As shown by our chart, oil output has been on an upward trajectory since Sept ’22 when it fell to recent year lows of c.1.1mbpd.  Although output recovery has a long way to go before reaching historical levels, it is now back to levels seen a year ago. The overall output is about 2% higher y/y.

The positive outcome in oil production is primarily due to the security agencies’ increased efforts to secure oil production and evacuation infrastructure in the oil-producing region of the Niger Delta.

From the data, evacuations through the Forcados and Bonny terminals increased to c.248kbpd and 78kbpd, compared with 221kbpd and 52kbpd, respectively, in Jan ’22.

While evacuation from Forcados is approaching its historical peak, oil export through Bonny is still far below its normalised average level of over 200kbpd.

We anticipate an increase in oil evacuation through the Bonny terminal going forward, following Shell petroleum’s decision to resume oil exports this month after lifting a force majeure that had been in place over the past year.

From a fiscal standpoint, despite the rise in crude oil output, oil revenues are not expected to improve this year, mainly due to weaker pricing.

The price of Brent crude is down c.8% ytd to c.USD78/b as a result of concerns around weak global growth this year. This compares with an average price of USD104 in 2022.

As a result, Nigeria missed a chance to increase oil revenue and grow its foreign reserves last year.

Regardless, the increase in crude oil production is a positive step forward. If the current pattern holds, the nation’s daily oil production may edge past 1.6 million barrels per day.