Nigeria’s oil production has rebounded to its highest level since April 2021, reaching 1.69 million barrels per day (bpd), raising the prospects for increased petrodollar inflows, which could bolster the Nigerian economy amid ongoing fiscal reforms.
Nigeria’s 2024 budget is premised on an oil revenue of N7.94 trillion assuming the country consistently achieve 1.78 million bpd and oil price of $78. However, oil theft and pipeline vandalism have long plagued Nigeria’s upstream oil and gas industry, driving majors out of the biggest Organisation of Petroleum Exporting Countries producer (OPEC) in Africa and often resulting in force majeure at the key crude oil export terminals.
Data from the National Liquid Hydrocarbon Production reports by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed the country’s oil output hit 1.69 million bpd in November 2024.
On average, crude oil production for the month was 1.48 million bpd. While blended and unblended condensate were 46,483 and 158,345 bpd respectively.
Crude oil is a natural liquid extracted from the ground. Blended condensate is created by mixing natural gas liquids, while unblended condensate remains pure without any mixing or processing after separation from raw natural gas.
Further findings showed Nigeria’s oil production rose coming into 2024 with 1.64 million bpd in oil production in January but couldn’t maintain the momentum as output fell to 1.54 million bpd in February.
The downhill trajectory continued in March when the production level dropped to 1.44 million bpd. However, it rose by 0.65 percent to 1.47 million bpd in April.
Production increased for the next four months until September and October when output declined to 1.54 million bpd and 1.53 million bpd respectively.
Higher production, coupled with steady oil prices, is projected to improve foreign exchange reserves, reduce budget deficits, and ease the pressure on the naira. Nigeria’s 2024 budget is premised on an oil revenue of N7.94 trillion assuming the country consistently achieved 1.78 million bpd and oil price of $78.
The recent jump in production to 1.7 million bpd (including condensate) in November 2024 has been the result of Nigerian authorities ramping up security measures at oilfields to crack down on pipeline theft and sabotages.
Nigeria has consistently struggled to produce up to its maximum capacity in recent years and in January saw its OPEC quota lowered by some 200,000 bpd after months of underproduction — a symbol of declining African influence within the bloc.
In the past year, the country has seen an attempted exodus from its onshore and shallow water by IOCs including ExxonMobil and Shell, which have sought to sell assets to local firms.
Read also: Nigeria’s crude oil production in October rises by 35,000 barrels- OPEC
President Bola Tinubu, who campaigned on a promise to reform the country’s oil sector, declared a state of emergency in the industry in June, directing security agencies to go after thieves and vandals in the Niger Delta.
“These measures have directly improved the uptime of the Trans Niger Pipeline in the eastern Niger Delta, and today, all operating companies along the TNP can produce into this major trunkline,” Olu Verheijen, special adviser on energy to President Bola Tinubu said Nov. 14 at an industry event.
The oil sector reforms included an improved fiscal framework for producers, she added, including in the deepwater, and were set to attract new investments that would unlock around 1.3 billion barrels of oil equivalent in oil and gas resources.
Nigeria’s budget for next year is based on 1.7 million bpd of oil production and oil prices at $75 per barrel.
Last month, Nigeria boasted it had reached an output of 1.8 million bpd and said it could even hit 2 million bpd by the end of the year.
Earlier, Mele Kyari, GCEO of the Nigerian National Petroleum Company (NNPC) Limited, revealed that the state-owned oil company and its partners have revved up crude oil and gas production to 1.8 million bpd in November.
“The team has done a great job in driving this project of not just production recovery but also escalating production to expected levels that are in the short and long terms acceptable to our shareholders based on the mandates that we have from the President, the Honourable Minister, and the Board,” Kyari said.
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