The Minister of State for Petroleum, Dr. Emmanuel Ibe Kachikwu, disclosed last week that Nigeria currently produces 1.78 million barrels of crude oil per day (b/d). Speaking in Abuja, Dr. Kachikwu added that the country was expecting a significant boost from the Egina Oil Field which should increase production by 150,000 b/d before the end of the month.
The Egina oil field located some 130 kilometers off the coast of Nigeria at water depths of more than 1,500 meters, started production early in 2019 and should ultimately produce 200,000 b/d at peak output, which amounts to around 10% of Nigeria’s production.
You will recall that the Organisation of the Petroleum Exporting Countries (“OPEC”) had at its meeting in December agreed to reduce its output by 800,000 b/d for the first six months of the year. Nigeria, who is subject to the recent OPEC/non-OPEC production cuts, is expected to contribute by reducing up to 40,000 b/d of its output. Notably, the OPEC production cuts do not include the extremely light oil known as condensates.
Dr. Kachikwu had this to say on the implications of the OPEC cuts on the increased production from the Egina Oil Field:
“The work that we have at the ministry is to determine what component of that 150,000 barrels is pure crude and what is condensates,” he said. “If it is pure crude it raises certain other implications in terms of the OPEC quota. If it is condensates then obviously we smile.”
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