A review of industry data by THISDAY reveals that Nigeria’s crude oil production has shown a 5.7% year-on-year increase between January and September 2023 compared to the same period in 2022. While this is a positive sign, Nigeria is still working towards meeting its OPEC production targets. Factors like pipeline vandalism and the adoption of alternative transportation methods have played a significant role in this shift.
Key Points:
- Production Increase and Context:
- Nigeria’s crude oil production between January and September 2023 increased by 5.7%, equating to approximately 18.3 million additional barrels compared to the same period in 2022.
- Despite this progress, the country is still striving to meet its OPEC production target of 1.74 million barrels per day.
- Transportation Method Shift:
- Due to persistent pipeline vandalism, operators in Nigeria have turned to alternative means of moving crude oil to the high sea. This includes the use of small river-going tankers, which has notably boosted the country’s OPEC quota.
- Impact of Alternative Transportation:
- The shift in transportation methods, bypassing major pipelines in the Nembe Creeks, has contributed to the increase in production and helped Nigeria meet its OPEC quota.
- Economic Impact of Underproduction:
- Despite the recent production increase, Nigeria’s total losses due to underproduction in the third quarter of 2023 are estimated to be as high as $3.89 billion.
- Government’s Production Target:
- Senator Heineken Lokpobiri, the new Minister of State Petroleum (Oil), has set an ambitious target of achieving 2 million barrels per day by the end of December 2023. This is part of a broader effort to increase revenue and reduce dependency on oil.
Conclusion: While Nigeria has made strides in increasing its crude oil production in 2023, there are still challenges to overcome, including meeting OPEC targets and addressing issues of insecurity and pipeline vandalism. The adoption of alternative transportation methods has proved beneficial in boosting production. Minister Lokpobiri’s commitment to raising production and diversifying the country’s revenue sources underscores the government’s determination to drive economic growth. The coming months will be crucial in evaluating Nigeria’s progress towards achieving its ambitious production targets.
