The Nigeria federal government has revealed plans aimed to increase crude oil production to 2.5 million barrels per day, potentially boosting the country’s foreign exchange reserves significantly. This comes at a time when the Brent crude, one of the major benchmarks for oil, witnessed a price increase over the last three days, exceeding $84 per barrel on 1st of March. This surge comes after weeks of trading around an average of $80 per barrel. In January 2024, Nigeria’s oil production reached 1,426,574 Barrels Per Day (bpd) up from the previous month’s output of 1,335,098bpd, representing a significant increase of 91,476 barrels daily as reported by the Nigeria Upstream Petroleum Regulatory Commission (NUPRC).
In January 2024, Nigeria’s oil production increased to 1.64 million barrels per day, up from 1.55 million barrels per day in December 2023, as reported by the NUPRC. Additionally, the prices of different oil grades such as WTI crude and Murban crude saw an increase, with West Texas Intermediate (WTI) crude trading at $80.74 and Murban crude at $84.07 on Friday evening. The prices of WTI crude rose by $2.48, a 3.17% increase from the previous day, while Murban crude saw a $1.85 appreciation, representing a 2.25% increase from cost witnessed on February 29th .
Efforts are underway to make implementation of Petroleum Industry Act.
This information was contained in a document the NUPRC released on March 1, in Abuja, regarding Nigeria’s oil sector. Chief Executive officer, NUPRC, Gbenga Komolafe noted that Nigeria has substantial oil and gas reserves. As per his statement, the commission claimed they have been diligently putting effort into making sure that the Petroleum Industry Act is successfully put into action to boost oil and gas reserves and reach the national target of producing 2.5 million barrels of oil and condensate per day in the near future.
Nigeria’s oil and gas reserves make up a significant portion of the resources in Africa, accounting for 30% of oil and 34% of gas reserves on the continent. These vast reserves offer promising opportunities for sustainable growth and economic prosperity. While the current daily production averages 1.33 million barrels of oil and 256,000 barrels of condensate, there is a technical production potential of 2 million 2.26 million bpd, the current OPEC quota stood at 1.5 million bpd.
Bridging the production level and maximum capacity gap is crucial.
He observed that by bridging the difference between current oil production levels and the maximum capacity, there is a prime chance for Investors to capitalize on profitable opportunities. This also provides Nigeria with the possibility to generate extra income, alleviate the existing foreign exchange deficit, and enhance economic stability. According to Komolafe, Nigeria is fortunate to have abundant hydrocarbon resources and promising opportunities for green and blue hydrogen, solar power, wind energy, biomass, and essential minerals needed for clean energy technologies. In addition, the country has a youthful population that is steadily expanding.
Moreover, Nigeria’s future success hinges on harnessing its vast array of human, natural, and material resources to drive economic advancement and Sustainable Energy initiatives. The Federal Government made it clear to Western nations in Europe and America that Nigeria will continue to explore fossil fuels, despite pressure from the West to halt investments in fossils. Governments further pointed out the irony of some European and American countries investing in fossil fuels while urging Africa to cease crude oil exploration on the continent.
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During a summit in Abuja on 27th of February, the Minister of State for Petroleum Resources, Heineken Lokpobiri, announced that efforts were being made by the Federal Government to prevent International Oil companies from fully withdrawing their investments from Nigeria. The minister called on all parties involved to assist the Federal Government in enhancing the Oil and Gas Industry in Nigeria, in order to fully maximize the advantages of these resources for the improvement of the lives of Nigerians.