Nigeria is an oil-producing country and a member of the Organization of the Petroleum Exporting Countries (OPEC). This is not novel information, but what is relevant is that Nigeria earns majority of its revenue from the sale of crude oil that is extracted from the Niger Delta region. So, whatever happens in that axis has a profound effect on Nigeria’s economy. In an infamous widespread record, Nigeria’s crude oil production fell below one million barrels per day in August 2022. This was a 32-year low as the country battled rampant theft from its pipelines.
This did not only affect Nigeria’s revenue but the economy also took a severe hit because of it. However, Nigeria’s oil rig count has been growing since the last quarter of 2022. Crude oil production has been on the rise as a result of aggressive exploration and improved security in the Niger Delta region. The upward trajectory of the country’s rig count may be at a slow rate, but the country has added at least one rig per year.
OPEC data showed significant improvement in output.
An oil rig is a large structure with facilities to extract and process petroleum and natural gas that lie in rock formations beneath the seabed. In the newly released OPEC Monthly Oil Market Report for January 2023, Nigeria’s rig count rose from nine in the third quarter of 2022 to 13 in January 2023. In other words, a minimum of one rig was added in each quarter. According to OPEC data, the rig count stood at nine in the third quarter of 2022, 10 in the fourth quarter, 12 in December 2022, and then 13 as of January 2023.
Because of insecurity and other factors, the country’s rig count declined from 16 to 11 between 2019 and 2020. It further decreased to seven in the year 2021 due to pipeline vandalism and oil theft in the Niger Delta region. However, the trend reversed in the first quarter of 2022. It increased to eight, 10 by second quarter, and 11 by July 2022 when the government finally put measures in place to tackle the challenges of pipeline vandalism. Meanwhile, the count again dropped to nine in the third quarter of 2022. But after this, it has been on a consistent rise. The country’s crude oil production record also showed that output has picked up from 900,000 barrels per day (bpd) in third quarter of 2022 to 1.1mbpd in the fourth quarter of 2022. The country produced 1.2mbpd in December 2022 and January 2023 according to OPEC sources.
Nigeria is on its way to producing 1.8bpd as OPEC assigned.
For the past two years, Nigeria has failed to meet up with OPEC’s production quotas due to vandalism of the country’s pipelines and oil theft. But OPEC has said that demand for its crude in 2023 remained unchanged from the previous MOMR to stand at 29.8mbpd, which is around 0.9 mbpd higher than the 2022 figure. Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari, during the official cutover ceremony for transforming NNPC to NNPCL in Abuja recently said that the country was on its way to producing 1.8mb/d of crude oil as assigned by OPEC.
He said, “As of yesterday, we had crossed 1.6 million barrels per day. This is not rocket science. We have a line of sight to recover to the quota level of 1.8 million barrels per day.” He said that he knew it was not far away. In probably two to three months maximum, Nigeria will reach the target and will bring back partners to invest. He said Nigeria will return the confidence of its investors and ultimately bring back growth.
Kyari said Nigeria can achieve 2.2mbpd crude oil production in 2023.
According to him, the NNPCL and other stakeholders will work to achieve the goal of increased crude oil by ensuring cost reduction, increased production, being prudent in commercial decisions, fairness to stakeholders, and adherence to the provisions of the Petroleum Industry Act. Also, during the 13th Global United Arab Emirates forum held in January 2023, Kyari said Nigeria could achieve 2.2mbpd of crude oil production in 2023. This is after the press had in January reported how international energy firms such as Chevron and its Joint Venture and NNPCL were in talks to undertake fresh drilling operations in one of their core assets in Nigeria.
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Rising oil production may boost FG revenue – Aggressive exploration and improved security have an impact on economy. – Express your point of view.
It should come as no surprise that Nigeria is both an oil-producing nation and a member of the Organization of the Petroleum Exporting Countries (OPEC).
Relevant facts include the fact that Nigeria obtains the majority of its income from the sale of crude oil that is produced in the Niger Delta area.
It should come as no surprise to us that the economy of Nigeria is profoundly impacted by events occurring in that axis.
This not only had an impact on the country of Nigeria’s revenue but it also had a significant negative impact on the economy.
Although the increase in the number of rigs in the country is occurring at a very sluggish rate, the country has added at least one rig per year on average.
The NNPCL and other interested parties will collaborate in an effort to achieve the goal of increased crude oil production by reducing costs and boosting output respectively.
Nigeria will achieve its goal, which will result in the return of partners willing to spend, as well as the return of the confidence of its investors, which will finally result in the return of growth.
Rising oil production will surely boost FG revenue if the production is going on well oil is part where we generate more revenue to the country
This not only had an effect on the amount of money that was brought into the Nigerian government, but it also had a significant and adverse effect on the economy.
Aggressive exploration and improved security have an impact on economy. Nigeria is really making waves but bad government is affecting everything
Oil production will actually generate more revenue for the government. I just hope we are able to manage the resources very well.
Aggressive drilling and enhanced security in the Niger Delta region have led to an increase in crude oil production.
Definitely the rising of oil production will increase the oil revenue and also boost the country revenue.The country need this increment at this special time.
This not only affected Nigeria’s earnings but also significantly harmed the economy.
Even though the rate at which the number of rigs in the country is increasing is quite slow, the country has added at least one rig every year on average.
More tax money will be brought in by the oil industry. Ideally, we’ll be able to efficiently allocate those funds.
The government need to put measures in place to tackle the challenges of pipeline vandalism because it’s about getting stay in continuance.
It is a reality that Nigeria rising oil production can boost Federal Government revenue but that can be achievable when the oil theft, pipe vandalization and all other security challenges are addressed
If the factors affecting crude oil production is not addressed and resolved there is no way the rise in oil production can boost government revenue except the needful is done.
The country has added at least one rig on average every year, notwithstanding the very slow rate at which the number of rigs is rising.