Analysts at the Centre for the Study of Economies of Africa (CSEA), a leading think-tank with primary focus on developments in African economies, have outlined some policy options for the Nigerian government to adopt in order to boost the nation’s crude oil production and improve foreign exchange earnings from the hydrocarbon resources industry.
The researchers, in the firm’s just released ‘Nigeria Economic Update Issue 15’ circulated to our correspondent, noted that the Organization of Petroleum Exporting Countries (OPEC) April Monthly Oil Market report showed that Nigeria’s average daily crude oil production (based on direct communication) declined by 4.37% (64,000 bpd), from 1.465 million bpd recorded in the preceding month to 1.401 million bpd in March.
The report also showed that oil production fell by 6.6% below OPEC’s 1.5 million bpd quota and a staggering 32% short of the country’s 2025 target of 2.06 million bpd.
The CSEA’s experts noted that the persistent shortfalls in meeting government production targets stemmed from systemic challenges such as chronic underinvestment and rampant oil theft, all contributing to suppressed output.
According to them, the decline in oil production and the falling oil prices in the international market are likely to strain fiscal revenues, exacerbating budgetary pressures, and by so doing detrimentally impact national reserves, thereby reducing the availability of resources for developmental spending.
The economic analysts pointed out that while the Federal Government had no control over global oil prices, it can, to some extent, meet its OPEC production quota.
To achieve this, they advocated that the government must intensify efforts by enforcing stricter penalties for oil theft, while fostering greater collaboration with local communities.
Also, they stressed the need for the Nigerian government to attract investment in the sector “by ensuring that regulatory bodies and the judiciary work together to provide an enabling environment for investment and modernisation of oil infrastructure.”
The CSEA experts’ recommendations are coming against the backdrop of the government’s directive to the Nigerian National Petroleum Company Limited’s (NNPCL’s) management to rev up crude oil production to 2.5 million barrels per day (mbp/d).
The Minister of State for Petroleum Resources (Oil), Mr. Heineken Lokpobiri, gave the charge to the NNPCL;s management during his interactive session with journalists on the sidelines of the Oil Technology Conference (OTC) Africa Energy Forum (AEF) in Houston, Texas.
He pointed out that though President Bola Tinubu gave the new NNPCL’s management a mandate to grow oil production to two million barrels by this year, he increased the target to 2.5 million bpd because it is feasible.
The minister clarified: “When the new NNPC management visited me, I increased their oil production target to 2.5 million bpd from the initial two million barrels given to them by the President.”
Lokpobiri maintained that the target could be met and even surpassed because during COVID-19, when there was no new investment, oil production grew to 2.5 million bpd, saying that “the 2.5 million bpd oil production is easily realisable because all the bottlenecks against our oil production are being addressed.”