Oil production in West Africa is facing significant challenges that make it difficult to return to pre-coronavirus levels, although global crude production is on the way to recovery.
A recent report by the energy research firm Rystad Energy believes that the Corona epidemic may leave permanent scars in West Africa, which is an important region for the production of sweet crude oil, with obstacles represented in the lack of investment, the decline in drilling in depleted fields, and the dilapidated infrastructure.
Sweet crude is the preferred grade for jet fuel production, and it is the part that has been hit the hardest as demand for oil fell last year.
West African Production
West African oil production fell to 3.71 million barrels per day last year, compared to 4.12 million in 2019.
Rystad Energy expects oil production in West Africa to continue to decline this year, to record 3.39 million barrels per day.
With the return of demand for jet fuel amid countries’ tendency to ease travel restrictions, oil production is likely to rise in 2022 and 2023, according to the report.
Nevertheless, the Energy Research Corporation expects oil production in West Africa to re-fall to less than 3 million barrels per day starting in 2025, unless Nigeria and Angola – in particular – are able to achieve a strong return to production.
For Rystad Energy analyst Nishant Bhushan, the structural obstacles facing exploration and production in West Africa are realities that will not fade in the short term, hindering Nigeria, Angola and others from wanting to increase production even if jet fuel makes an impressive recovery.
The decline in oil production in West Africa is due to Nigeria and Angola – the largest producers of crude in the region – which are estimated to have together lost 440,000 barrels per day against pre-Covid-19 expectations, in addition to a significant decrease in oil supplies for Gabon, Congo and Equatorial Guinea. , according to the report.
The decline in Nigeria’s oil production in recent years comes with the country’s failure to attract new investments in the oil and gas industry, whether exploration or development of new fields.
According to the latest monthly reports of OPEC; Nigeria’s oil production reached 1.45 million barrels per day last September, after averaging 1.57 million during 2020.
In the short term, Nigeria’s crude production is likely to rise to 1.55 and 1.58 million barrels per day in 2022 and 2023, with some new developments in some fields, Rystad Energy estimates.
Inspite of that; Rystad Energy believes Nigeria’s production will decline again; Due to the significant shortfall in new discoveries, it will reach 1.25 million barrels per day by 2026.
such as Nigeria; The decline in oil production in Angola is also structural; With a lack of investment, production has fallen from 1.74 million barrels per day in 2015 to approximately 1.11 million expected this year.
Crude production in Angola recorded 1.13 million barrels per day last September, after it averaged 1.255 million barrels last year, according to the monthly OPEC report.
It is estimated that new exploration and production projects will add 40 to 45 thousand barrels per day this year and another 80 to 90 thousand barrels per day in 2022.
Inspite of that; This will not be enough to stop Angola’s oil production from falling to between 750,000 and 800,000 barrels per day by 2026, according to Rystad Energy.
SOURCE : ATTAQQA