Several stakeholders within the oil and gas industry have expressed their optimistic forecasts for Nigeria’s economic expansion in 2024, attributing it to a surge in oil production. These stakeholders, who were individually interviewed in Lagos, confidently stated that Nigeria will surpass its expected oil output of 1.7 million barrels per day this year. Ayodele Oni, a partner at Bloomfield Law Practice said the oil and gas industry stood out as one of the profoundly influential sectors in 2023. However, the industry declined approximately halfway through 2023, primarily due to diminished petroleum output, political instability, and rampant theft.
Despite challenges faced, the oil and gas sector experienced a noteworthy boost in the last quarter of 2023. Enhancements in infrastructure were notable, as projects such as AKK, Dangote Refinery, and marginal field production were successfully executed. Theft and insufficient key infrastructure were cited as major factors hindering the sector’s ability to meet the petroleum production quota for the year. In order to tackle these difficulties, he suggested that the government should introduce incentives for the augmentation of crude oil production and encourage foreign investments within the sector. Additionally, he proposed a decrease in occurrences of petroleum theft and pipeline vandalism.
Government has undertaken the initiation of the CNG venture.
According to Oni, a potential solution would be for the government to facilitate a proactive atmosphere for investors, along with focusing on crucial infrastructure improvements. Moreover, the government has displayed unwavering dedication towards transforming Nigeria into a dominant force in the gas industry, in addition to being renowned for its oil reserves. The government’s commitment is not limited to the oil sector; equal emphasis has been placed on developing the gas sector through policies and proactive measures. The Petroleum Industry Act has been diligently enforced, taking into account the relevant legal framework and measures to promote deregulation.
Oni elaborated that key authorities are taking proactive measures to guarantee the establishment of appropriate regulations in the oil and gas industry to foster the foreseen expansion. Moreover, he highlighted that the federal government has undertaken the initiation of the Compressed Natural Gas venture (CNG), acknowledging the immense gas capabilities of the nation and the remarkable advantages it presents over alternative fuel sources. While the CNG projects are currently in their early development phase, substantial advancements are predicted.
GDP is expected to grow by 3.2% in 2024 and 3.6% in 2025.
Bamidele Adesina, a specialist in the analysis of the oil and gas sector, expressed concerns regarding the hindrances that might impede the anticipated growth. Adesina said that the effects of economic reforms and potential security concerns in the Niger Delta, a region vital for oil production, could further complicate matters. In addition, the growth might be constrained due to factors such as increased inflation and interest rates. Nevertheless, he said, it is foreseen that the economy will gain momentum in 2024, mainly due to an expected increase in oil production in the year.
Mr. Adesina stated that according to Focus-Economics, the GDP is expected to grow by 3.2% in 2024 and 3.6% in 2025. Nonetheless, the enduring instability in the Niger Delta region presents a notable threat to the overall economic prospects. It should be noted that the country expects to achieve an average daily oil production of 1.35 million barrels in 2024. Heineken Lokpobiri, Minister of State for Petroleum Resources (oil), had previously made known the federal government’s commitment to eliminate any hindrances that may impede Nigeria from meeting or even exceeding its expectations.
Oil production increased from 1 million bpd to 1.4 million bpd.
Lokpobiri expressed the government’s willingness to maintain collaboration with stakeholders even beyond 2024. This collaboration aims to ensure the production of 1.7 million barrels per day, which is crucial for meeting budget requirements and satisfying local demand. Notably, he emphasized the growth trajectory of the sector under the current administration, where the oil production increased from approximately 1 million bpd to 1.4 million bpd. The minister proclaimed his aim of sustaining this ascending path, affirming the government’s dedication to establishing a favorable atmosphere that fosters the prosperity of stakeholders.