Nigeria’s potential for producing crude oil is 2.24 million barrels per day (mbpd), which is more than the country’s current production level of 1.75 million bpd, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). Inefficient production methods, excessive prices, entrance hurdles, and Technology restrictions are all blamed for this discrepancy. This information was presented by Gbenga Komolafe, the Chief Executive of NUPRC, during the Nigeria International Energy Summit in Abuja. In order to close the output deficit, NUPRC is implementing tactics like increasing openness, engaging with exploration and production (E&P) firms, cutting expenses, streamlining production, and implementing cutting-edge oil recovery technologies.
In order to reach its Project 1MMbopd target—which is to boost production by 1 million bpd—the commission is also concentrating on reactivating shut-in wells and taking advantage of quick-win possibilities. The Advanced Cargo Declaration Solution and an Engineering Audit of upstream measuring facilities and equipment have been implemented by NUPRC to combat crude Oil Theft and Revenue loss. With 95% of foreign exchange profits and 70% of Government Revenue coming from the oil and gas industry, Komolafe emphasised that the sector is still vital to Nigeria’s economy.
As of 2023, Nigeria is the world’s fifteenth-largest producer of oil.
Both Nigeria’s oil and gas reserves have expanded by 1.43% and 0.21%, respectively, to 37.5 billion barrels and 209.26 trillion cubic feet. Between 2021 and 2025, the number of rigs in the nation grew from 8 to 40, with plans to soon reach 50. Oil output has also increased by 70%, from 1 million barrels per day in 2021 to 1.75 million barrels per day now. After completing the 2022/2024 bid licensing round, the NUPRC awarded 27 Petroleum Prospecting Licenses in an effort to promote exploration and quicken field development.
High-quality geological data will support the 2025 bid round’s new annual licensing strategy. Additionally, $2.5 billion in investments are anticipated to be made possible by the Nigeria Gas Flare Commercialisation Program, creating a substantial amount of income and employment prospects. As of 2023, Nigeria is the world’s fifteenth-largest producer of oil, producing about 1.5 million barrels per day on average. Comparing this amount to major oil-producing countries like Saudi Arabia and the United States, it is minimal.
Industry insiders point to a number of causes for Nig’s output limitations.
Global crude oil production increased by 1% in 2023, mostly because to increased production in the United States, Brazil, and Iran, which countered OPEC+’s production limits. The difficulties Nigeria confronts in scaling up its output to compete with elite manufacturers are highlighted by this global environment. Industry insiders point to a number of causes for Nigeria’s output limitations. Persistent obstacles have included growing Security concerns along with operational and technical issues. Operational problems have hampered the nation’s vital oil infrastructure, and growing security risks have made oil corporations operating in the area even more concerned.
International oil corporations’ (IOCs’) asset sales have also shifted operational, environmental, and security risks to domestic operators, who do not have the resources or technical know-how to adequately handle these difficulties. Uncertainties in regulations make matters worse. Investment in Nigeria’s oil industry has been limited by the regulatory environment’s ambiguity and the failure to uphold contract sanctity. International investments are further complicated by the Nigerian Oil and Gas Industry Content Development Act of 2010, which favours Nigerian independent operators when awarding oil projects. Nigeria’s rising oil production has a variety of economic ramifications.
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Additionally, Nigeria’s oil industry played a crucial role in foreign exchange gains, contributing around 92% of the value of all exports in 2023, but making up only 5.5% of the country’s GDP. A severely unmet local energy market, as well as lost income and jobs, have resulted from the sector’s poor performance, which has been ascribed to years of underinvestment, inefficiency, and opacity. Increasing oil output might boost local industry, increase government revenue, and generate job possibilities. However, if the fundamental problems of infrastructure, security, and regulatory clarity are not resolved, the promised economic advantages might not materialise.