Abuja , Nigeria | — Nigeria will from this year begin to track the volume of its crude oil production from fields of production and loading bays, to sales destinations in a renewed effort to cut down on prevalent oil theft and loss of revenue, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said.
Speaking in a podcast in Abuja on the 2017 outlook for Nigeria’s petroleum sector, where he made projections of his work this year, Kachikwu also said he would initiate processes to gradually move the country away from holding annual crude oil lifting contracts to looking for partners that it could sign long-term lifting agreements with.
Oil theft has been just one of Nigeria’s oil industry problems in recent months. The country’s crude production has been severely crippled by militant attacks in the oil-rich Niger Delta to the point that Nigeria was exempt from OPEC’s production cut deal from November 30. Low oil prices and reduced domestic production have also battered Nigeria’s economy, which is highly dependent on oil export revenues.
Now Nigeria is aiming to increase its crude oil production and seeks to achieve lasting peace, Kachikwu said last month, adding that the country’s oil output had reached 1.8 million bpd. This recent production rate is higher than the average 1.63 million bpd in the third quarter of 2016, but still 400,000 bpd below the peak of 2.2 million bpd before the militant attacks on oil infrastructure started in the Niger Delta.
In this week’s address, minister Kachikwu also said that he would prefer long-term contracts for crude oil loadings compared to the current short-term contracts. Switching to longer-term crude deals would create contract certainty regarding the sales of Nigeria’s oil, the minister noted.
Just last week, state-held Nigerian National Petroleum Corporation (NNPC) said it had awarded the 2017/2018 crude oil term contracts to 39 companies to lift 32,000 bpd each and an NNPC unit to load 90,000 bpd.