Nigeria’s crude oil production increased to 1.307 million barrels per day (bpd) in July, according to the latest monthly oil market report from the Organisation of Petroleum Exporting Countries (OPEC).
The report highlights that the country boosted its output by 30,000 barrels per day compared to June 2024, when production stood at 1.276 million bpd.
The data provided is based on direct communication with Nigerian authorities. However, secondary sources indicated that Nigeria’s average daily crude oil production in June was slightly higher at 1.386 million bpd, reflecting a 16,000-barrel increase from May’s 1.369 million bpd.
Despite the slight decline in production noted by secondary sources, Nigeria retained its position as Africa’s leading oil producer. Libya followed closely, producing 1.175 million bpd in July.
Average Crude Oil Prices
OPEC data also revealed that average crude oil prices rose by 2.5% month-on-month in July, reaching $83.3 per barrel. This increase was driven by strong market fundamentals, although global macroeconomic uncertainties limited the gains. On a year-on-year basis, crude prices rose by 5.4%.
Key Takeaways
Nigeria’s average crude oil production of 1.307 million bpd in July highlights a consistent shortfall throughout the first half of 2024. The country has struggled to meet its OPEC production quota of 1.5 million bpd and its budget target of 1.78 million bpd.
This ongoing production shortfall poses a challenge to the revenue generation efforts of President Tinubu’s administration. Petroleum Minister Heineken Lokpobiri previously stated that Nigeria aims to reach a daily production of two million barrels by next year. However, the feasibility of this goal remains uncertain due to various challenges.
The oil sector continues to grapple with issues such as insecurity and low investment. These problems have been exacerbated by the exit of international oil companies (IOCs) and unresolved matters related to the approval of oil asset transfers. Earlier this month, the Nigerian National Petroleum Corporation Limited (NNPCL) announced renewed efforts to address these challenges, as production has stagnated over the past five months.
In March, President Tinubu signed several fiscal incentives designed to attract investment and reposition Nigeria as Africa’s leading destination for oil and gas projects. The country has experienced a decline in investments over the past decade.
These incentives include financial benefits for the development of non-associated gas, midstream operations, and deepwater projects. Additionally, the initiative aims to streamline the contracting process, reducing the cycle time to six months.