In February, Nigeria’s daily production of crude oil fell to about 1.47 million barrels per day (mbpd), which was less than the 1.5 mbpd OPEC quota. This represents a decrease of 70,000 barrels per day (or 2.1 million litres in a month) from 1.54 mbpd in January. The development follows Nigeria’s January production of 1.54 mbpd, which momentarily surpassed its OPEC limit and was hailed by industry players. But the Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) most recent data shows a setback.
From January to February, total oil production, including crude and condensates, dropped from 1.78 mbpd to 1.67 mbpd. Because to crude oil theft, Pipeline vandalism, and operational difficulties, Nigeria has continuously fallen short of its OPEC quotas in 2022, 2023, and 2024, despite efforts to boost érxcvr44ww. According to the U.S. “Drill, baby drill” strategy, Heineken Lokpobiri, Minister of State for Petroleum Resources, is still hopeful about raising production to 3 mbpd in 2025. Nigeria, according to OPEC Governor Ademola Adeyemi-Bero, should ideally be producing up to 4 mbpd because to its enormous hydrocarbon reserves.
Oil production has seen notable swings during the last ten years.
Although the nation’s January performance of 1.7 mbpd was viewed as a positive move, he feels that it still needs to show that it can improve production. Nonetheless, the recent decline in February could result in supply problems for nearby refineries and jeopardise the government’s 2025 budget goal of 2.06 mbpd. Nigeria’s oil production has seen notable swings during the last ten years, which may be attributed to both domestic issues and external market forces. With production levels ranging from 2 to 2.5 million barrels per day (mbpd), the Oil and Gas Industry accounted for almost 47% of government income between 2010 and 2014.
Production, however, started to dip after 2014 and fell below 2 mbpd in 2016, mostly as a result of further attacks on oil infrastructure. Production continued to decline, averaging 1.7 mbpd in 2020 and then dropping to 1.28 mbpd in 2022. In May of 2024, production hit 1.25 mbpd, one of the lowest levels in recent memory, continuing its downward trend. The Nigerian government has put in place a number of initiatives to boost the oil industry in reaction to the drop in production.
NOGICD Act of 2010 has also been instrumental in enhancing local capacity.
The elimination of gasoline Subsidies in 2023 was a dramatic change in policy, as they had previously cost the government billions of dollars per year. The Petroleum Industry Act (PIA), which was passed in 2021, also aimed to modernise the industry by encouraging Investment in gas Infrastructure and creating organisations such as the Nigerian National Petroleum Company Limited (NNPCL). The declaration of a State of Emergency on crude oil output in July 2024 and the allocation of $21 million for metering oil flow stations in the Niger Delta are two examples of the increased efforts to combat pipeline damage and oil theft.
Several measures have been put in place by the government to improve Security and operational effectiveness in the oil industry. In order to bring calm back to the Niger Delta, terrorist organisations were granted amnesty. In order to utilise Nigeria’s substantial gas reserves, the larger Gas Master Plan was started in 2008 and includes infrastructure investments like the Abuja-Kaduna-Kano gas pipeline. Through its mandate for greater engagement of Nigerian enterprises in the oil and gas industry, the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010 has also been instrumental in enhancing local capacity.
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Diversifying Nigeria’s Economy is crucial to reducing the dangers connected with its reliance on oil, according to economists and industry observers. In Nigeria, where the importance of oil has caused other industries like Manufacturing and Agriculture to be neglected, the so-called “Dutch Disease” phenomena has taken shape. Increased investment in these industries is recommended by experts as a way to generate new Revenue streams and lessen reliance on changes in the price of oil globally. Furthermore, tackling problems like Corruption and poor management in the oil industry is essential for long-term economic expansion.