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Recovery signs emerge as Nigeria returns to Africa’s top oil producer

The reign of Angola as the leading oil producer in Africa has finally come to an end as hostilities reduces to barest minimum in the Niger Delta.

At the height of the vandalism and kidnapping of oil workers in producing communities, Nigeria’s oil production waned drastically to an all time low of 800bpd, but recent peace overtures and cementing of different understanding between the leader of the region, militants and federal government, peace has returned and exploration activities are peaking up.

Besides, the recent successful tour further calmed frayed nerves in the region.  In fact, the impact of the decline in violence was immediate, and led to a 28% month-on-month increase in output to 1.8m bpd in November, which rose to 1.94m bpd by the close of the year.

It would be recalled that the Ministry of Petroleum Resources earlier last week during the oil summit at Abuja revealed that crude production had reached the 2m-bpd mark.

That figure is up from the first eleven months of 2016, when the country averaged 1.85m bpd, according to a December report by the state-owned Nigerian National Petroleum Corporation (NNPC).

Besides, the recent exemption from OPEC’s decision to cut global production, along with a drop in incidents in the oil-producing Niger Delta, have helped sustain the increased output and allowed Nigeria to overtake Angola as Africa’s biggest producer.

In fact, experts say a combination of the impacts of the OPEC exemption and return of peace to the region at the same time shut exploration high, leading to recapture of Africa’s top exporter of the global product.

Nigeria was granted an exemption to the production cut due to the challenges it has faced maintaining output and broader economic headwinds, including its first recession in almost 30 years and a depreciating currency.

Crude output had fallen from 2.1m bpd in the first three months of 2016 to 1.7mbpd by the second quarter, while GDP is estimated to have shrunk by 1.54% over the year, according to the Ministry of Budget and National Planning.

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