Nigeria produced 276.6 million barrels of crude oil in the first seven months of 2024, but fell short of its OPEC production target by approximately 55 million barrels, according to data from THISDAY.
The Organisation of Petroleum Exporting Countries (OPEC) had anticipated Nigeria would contribute 331.8 million barrels to the global oil supply during this period. However, the country’s output was 276.6 million barrels, leading to a shortfall of 55.1 million barrels, or over 18%.
In June 2023, OPEC+ reduced Nigeria’s output target for 2024 to 1.38 million barrels per day (bpd) from 1.74 million bpd in 2023, due to persistent underperformance. Despite this, OPEC agreed to a revised quota of 1.58 million bpd for Nigeria, pending independent verification of the country’s ability to meet this target.
Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) shows that Nigeria’s production varied each month: 44.2 million barrels in January, 38.3 million barrels in February, and 38.1 million barrels in March. April’s production was 38.4 million barrels, May’s was 38.8 million barrels, June’s was 38.3 million barrels, and July’s reached 40.5 million barrels, totaling 276.6 million barrels.
Average daily production rates fluctuated, peaking at 1.43 million barrels per day in January, then dropping to 1.32 million bpd in February, and further to 1.23 million bpd in March. Production increased slightly to 1.28 million bpd in April, then fell to 1.25 million bpd in May, rose to 1.28 million bpd in June, and reached 1.3 million bpd in July. Despite recent increases, Nigeria has not met its OPEC quota of 1.58 million bpd. When including condensates, production rose to 1.533 million bpd in July.
Minister of Petroleum Resources Senator Heineken Lokpobiri recently stated that Nigeria aims to achieve daily production of 2 million barrels by 2025. The country attributes its production shortfall to significant oil theft, pipeline vandalism, and outright theft, which have hampered efforts to meet OPEC targets and improve foreign exchange earnings.
Nigeria’s economic struggles are exacerbated by its inability to significantly increase oil output. The country, heavily reliant on oil for foreign exchange, has struggled with underproduction and frequent borrowing to address economic challenges.
Despite recent efforts, including a state of emergency declared by the Nigerian National Petroleum Company Limited (NNPC) at the Nigeria Oil & Gas Conference and Exhibition (NOG) in Abuja, oil theft and pipeline issues persist. NNPC’s Mele Kyari vowed to tackle these challenges aggressively, with the aim of boosting production.
To address the crisis, Nigeria has recently employed barges to transport oil and is investing in improved metering and tracking technology to prevent theft and ensure accurate reporting. The Federal Executive Council (FEC) has approved contracts to meter all 187 oil flow stations and implement software for tracking oil movement in high seas.
Despite a 16.7 million barrel increase in production during the first six months of 2024 compared to the same period last year, the growth was insufficient to alleviate the country’s economic difficulties. At an average Brent crude oil price of $85 per barrel, this increase could have generated an additional $1.41 billion. However, the improved production has not been enough to resolve Nigeria’s ongoing economic issues, largely driven by reduced foreign exchange inflows from oil.
Nigeria’s continued reliance on oil and its struggle to boost production underscore the critical need for effective solutions to address theft and infrastructure challenges.