Connect with us

Energy

IEA: Nigeria Has Only 1.42m bpd Production Capacity, Zero Spare Output

Published

on

Nigeria’s crude oil production averaged 1.238m bpd in June – OPEC

The International Energy Agency (IEA) has said that Nigeria currently has a sustainable crude oil production capacity of 1.42 million barrels per day and zero spare capacity, despite the recent announcements that the country could significantly raise output in the coming months.

The organisation stated this in its latest Oil Market Report (OMR), painting a sobering picture for Nigeria, one that sharply contrasts with the country’s formal Organisation of Petroleum Exporting Countries (OPEC) production target of 1.5 million bpd.

ALSO READ: Prices of Petrol, Diesel, LPG Will Continue to Fall – NMDPRA

According to the agency, which provides authoritative data, analysis and policy advice on global energy markets, technologies and transitions, Nigeria’s output cannot be immediately ramped up in response to market tightness or geopolitical disruptions.

The IEA figures showed Nigeria’s OPEC crude oil production in recent months hovering well below the headline quota, after averaging about 1.44 million bpd in November and slipping to roughly 1.43 million bpd in December.

Although in absolute terms, the gap between quota and actual output appears small at roughly 70,000 bpd, in market terms it is significant, as it reflects structural constraints rather than voluntary restraint by Africa’s largest oil producer.

Nigeria’s crude oil production has for about six years struggled to match official pledges. While the Nigerian National Petroleum Company Limited (NNPC Ltd) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) have set ambitious targets of around 2 to 2.4 million bpd, actual output has consistently fallen short.

Despite occasional spikes in production, the shortfalls have been largely driven by underinvestment, security challenges, aging infrastructure, and operational inefficiencies, including non-functional evacuation routes.

However, apart from the 1.42 bpd reported by the IEA as Nigeria’s sustainable oil production in the short term, the absence of spare capacity was the most consequential element of the organisation’s assessment.

Spare capacity refers to volumes that can be brought online within a short period, typically between 30 to 90 days, and sustained for some time. In oil markets, this buffer is crucial, acting as insurance against shocks such as outages, conflicts, or sudden demand surges.

But according to the IEA, Nigeria currently lacks this buffer entirely, meaning that the barrels Nigeria is producing today are effectively its maximum sustainable output under present conditions.

A THISDAY analysis of the IEA data showed a clear contrast between Nigeria and core producers that continue to dominate global spare capacity.

Saudi Arabia remained the single largest holder of readily available supply, with a spare capacity of over 2.4 million bpd.

The UAE also retained meaningful flexibility of 60,000 bpd, while Iraq and Kuwait held a more modest but still material buffer of 53,000 bpd and 34,000 bpd respectively. This means that unlike Nigeria, these countries are not only producing below their technical limits but are doing so deliberately as part of OPEC+ supply management.

Outside this group, spare capacity was either extremely limited or non-existent, with several African producers mirroring Nigeria’s situation, albeit at much smaller absolute volumes.

Angola, for example, continued to struggle with structural decline driven by underinvestment and ageing fields, leaving it well below historical production levels and with no meaningful capacity to surge output.

Besides, Libya’s production still remains volatile with frequent outages, while among non-OPEC producers, the IEA data underscored a similar theme of tightness.

In all, the IEA put global oil demand growth at an average of 930 kb/d in 2026, up from 850 kb/d in 2025, reflecting a normalisation of economic conditions after last year’s tariff turmoil and lower oil prices than a year ago.

This year, it said that world oil supply is projected to rise by 2.5 million bpd to 108.7 million bpd, following an increase of 3 million bpd in 2025. Non-OPEC+ accounts for 1.8 million bpd of the gains in 2025 and 1.3 million bpd in 2026, it added.

THISDAY

Energy

U.S. to Tweak LNG Safety Rules for Foreign Markets

Published

on

With a view to accelerating infrastructure development and reducing operating costs, the U.S. Department of Transportation is contemplating a new set of safety regulations for liquefied natural gas facilities.

This is coming as American exporters prepare for another major expansion in global natural gas markets.

It was gathered that the proposal, issued by the Pipeline and Hazardous Materials Safety Administration (PHMSA), would modernize federal LNG safety requirements by incorporating standards developed by the National Fire Protection Association.

READ ALSO: Investors Embrace DPRP IPO Globally, 120 Countries, 54 African Nations

The changes are to address facility location, engineering, construction, operations, and maintenance, with greater flexibility to adopt newer technologies.

Transportation Secretary, Sean Duffy estimates that the updated framework could save LNG operators approximately $100 million annually while maintaining safety protections. The projected savings are an agency estimate, and the proposal has not yet become a final regulation.

The initiative comes as the United States strengthens its position as the world’s largest LNG exporter. American export capacity is expected to increase by approximately 100 million metric tons annually by the end of the decade, supported by projects already under development and additional planned investments.

Global LNG demand has also become more sensitive to geopolitical disruptions. Interruptions to Middle Eastern gas shipments associated with the conflict involving Iran have encouraged international buyers to evaluate alternative suppliers and diversify long-term procurement arrangements.

U.S. LNG developers have responded with additional investment commitments. Projects representing more than 50 million metric tons of annual capacity have reached final investment decisions since the beginning of 2025.

Major exporters, including Cheniere Energy and Venture Global, are pursuing additional development opportunities as federal policy places greater emphasis on expanding domestic energy infrastructure.

However, regulatory modernization does not eliminate the financial or operational challenges associated with LNG construction.

Developers must still secure the Federal Energy Regulatory Commission (FERC) approvals, complete environmental reviews, arrange financing, and address potential legal challenges. Pipeline connections, specialized equipment availability, construction costs, and long-term customer contracts also influence project schedules.

Delfin LNG, which is developing a floating export facility, illustrates the importance of infrastructure safety approvals. Its associated pipeline has not received publicly confirmed PHMSA clearance to resume operations following an explosion earlier this year.

Separately, FERC has proposed a streamlined authorization framework for certain modifications and expansions at existing LNG facilities, including activities that could qualify for automatic approval or shortened review periods.

For energy investors, the combined regulatory initiatives could improve development visibility and reduce some costs, although their financial impact will depend on final requirements and individual project circumstances.

Additional LNG export capacity could support demand for U.S. natural gas production, particularly from major producing regions connected to Gulf Coast terminals.

Midstream operators, engineering companies, compression equipment manufacturers, and construction contractors could also benefit from continued infrastructure investment.

At the same time, greater export demand may increase domestic natural gas price sensitivity to international markets, creating different implications for producers, utilities, and industrial consumers.

Investors will be monitoring the final PHMSA regulations, FERC permitting developments, LNG project financing decisions, and the pace at which proposed export capacity enters commercial service.

Continue Reading

Energy

NALPGAM Preaches Innovation, Safety to LPG Operators

Published

on

GAS: New Temile/Hyundai LPG Vessel to bring down high cost of cooking gas in Nigeria-NCDMB

The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has urged operators in Nigeria’s liquefied petroleum gas (LPG) industry to strengthen safety standards, improve regulatory compliance and adopt digital technologies to reduce operational losses and drive business growth.

The association said improved operational practices would help protect investments, enhance efficiency, build consumer confidence and support the sustainable expansion of C.

The call followed its 2026 webinar, themed “Downstream LPG Operational Excellence and Compliance,” which brought together industry operators, regulators and other stakeholders to discuss safety risks, market volatility, operational inefficiencies and regulatory requirements in the downstream LPG sector.

Speaking at the event, NALPGAM National President, Edu Inyang, said the industry’s long-term growth would depend on more than increased consumption and supply volumes, stressing the need to embed safety and operational efficiency in everyday business practices.

“The future of Nigeria’s LPG industry cannot be achieved by increasing volumes alone. We must grow safely, responsibly, efficiently and sustainably. Safety is not an occasional campaign; it must become a continuous industry culture,” he said.

READ ALSO: Tinubu Promises to Boost Local Production with NNPC Refineries

A major outcome of the webinar was a proposal for a NALPGAM Standard of Operational Excellence, anchored on four principles: safe and well-maintained facilities, competent and adequately trained operators, regulatory-compliant processes, and consumer protection.

Participants urged operators to integrate safety into routine operations, strengthen preventive maintenance and comply with licensing and incident-reporting requirements.

They also called for an end to unsafe practices, including unauthorised propane blending and illegal decanting, warning that such activities could expose businesses and consumers to avoidable risks.

Inyang said compliance should be viewed as a means of strengthening business performance rather than merely fulfilling regulatory obligations.

“Compliance is not merely a regulatory burden; it is a business advantage. Well-managed LPG operations reduce accidents, improve efficiency, protect investments and strengthen public confidence in our industry,” he said.

The webinar also highlighted the role of digital technologies in improving operational efficiency and accountability across the LPG value chain.

Participants identified smart filling systems, automated tank gauges, load cells, flow meters and vehicle-tracking systems as practical tools for monitoring product movements, reducing losses and improving inventory management.

Wider adoption of these technologies, they said, could help operators strengthen operational controls, minimise discrepancies and improve the reliability of LPG distribution.

The discussions come as Nigeria seeks to expand LPG consumption to approximately five million tonnes annually by 2030, a target that will require increased investment, stronger distribution networks and wider consumer access.

Stakeholders called for greater industry participation in the Decade of Gas LPG penetration programme, alongside stronger collaboration to expand access, improve cylinder traceability and promote certified local manufacturing.

The NALPGAM also urged regulators and programme coordinators to involve its members more actively in implementing LPG penetration and cylinder recirculation initiatives.

According to the association, its members’ nationwide presence and proximity to consumers could help improve the reach and effectiveness of programmes designed to increase LPG adoption.

Reiterating the association’s position, Inyang said the industry must establish clear operational standards that protect consumers while supporting efficient and sustainable business practices.

“Our aspiration is clear: every LPG facility must be safe and properly maintained, every operator competent and adequately trained, every process compliant, and every customer protected. This is the standard of operational excellence we must collectively pursue,” he said.

The NALPGAM reaffirmed its commitment to working with government agencies, regulators and industry stakeholders to develop a safer, more efficient and competitive LPG market.

The association maintained that embedding safety, strengthening compliance and deploying appropriate technologies would be critical to improving operational performance and supporting the long-term growth of Nigeria’s LPG industry.

Continue Reading

Energy

Fears of Fresh US Strikes on Iran Fuels Crude Price Surge

Published

on

OPEC Appoints Next Secretary General, Effective August 2022

Fears of renewed US military strikes on Iran and escalating threats to energy infrastructure across the Middle East heightened concerns about global crude supplies have pushed-up crude oil prices in the global market.

These factors pushed crude oil prices over $117 a barrel in the global market, even as oil theft and pipeline losses in Nigeria fell by 82.9 percent in five years, from 102,900 barrels per day (bpd) in 2021 to 17,600 bpd in the first seven months of 2026, amid fresh concerns about further increases in lost volumes after years of decline.

Nigeria’s oil benchmark, Brent crude, climbed by about 3.5 percent to cross $117 a barrel during trading before easing to just above $116, still up approximately 2.7 percent.

READ ALSO: Navy Uncovers 132,000 Litres of Stolen Crude Oil in Bonny

The latest rally followed reports that Washington was considering fresh military strikes against Iran after the November 3 midterm elections, raising concerns that the conflict, now in its eighth month, could escalate further rather than move towards a diplomatic resolution.

Iran had threatened to attack oil facilities, undersea cables, data centres and artificial intelligence infrastructure across the Gulf if the United States and Israel launched a new offensive against the country.

Recall that Brent crude traded at about $72 a barrel in February, before the war began, but surged to about $126 a barrel by the end of April as the conflict intensified and concerns mounted over supply security.

Tensions rose again during the week following claims by Iran’s Islamic Revolutionary Guards Corps (IRGC) that it struck four commercial vessels in the Strait of Hormuz on Wednesday.

The US ordered some diplomats and family members of American government employees to leave Saudi Arabia, which had faced continued attacks by Houthi rebels operating from Yemen.

Continue Reading

Copyright © 2022. Biztellers, powered by Alphaxristi.

0
Would love your thoughts, please comment.x
()
x