Nigeria’s oil sector, a critical source of government revenue and foreign exchange, is experiencing a significant slowdown. The first quarter of 2024 saw oil GDP growth drop to 5.7%, a sharp decline from the previous quarter’s 12.1%. This setback comes despite a slight increase in daily oil production compared to the same period in 2023.
Experts attribute the sluggish growth to persistent oil theft. Large-scale theft from pipelines and wells has crippled production and exports, posing a major challenge for the government. Senator Seriake Dickson criticizes the lack of a proper metering system to track oil production and sales, suggesting deliberate manipulation.
While the current oil price of $82 per barrel provides some additional revenue, overall output remains below the budgeted target of 1.78 million barrels per day. The ongoing theft, coupled with the exit of major oil companies like Shell and ExxonMobil from onshore assets due to security concerns, further limits Nigeria’s ability to maximize its oil wealth.
Source: Business Day