Nigeria’s Oil Production Rises 7.3% to 1.427mbpd in January 2024

By Adedapo Adesanya

Nigeria’s crude oil production for January rose by 7.3 per cent as data revealed that the country averaged around 1.427 million barrels of crude oil daily compared to the 1.33 million barrels daily production recorded in December.

According to the latest data from the Organisation of the Petroleum Exporting Countries (OPEC), at that level, Nigeria’s crude oil production for January saw an increase of 91,000 barrels when compared to the preceding month.

At 1.427 million barrels, the figure is far below the 2024 budget target of 1.78 million barrels of daily production set by Africa’s largest oil producer.

Nigeria has seen a decline in crude oil production occasioned by the triple whammy of rampant theft, divestment by oil majors in onshore fields, and lack of investment in the industry.

However, the administration of President Bola Tinubu has promised to restore confidence in the industry and achieve a crude oil production target of 4 million barrels daily by 2030. In the 2024 budget, the federal government set a benchmark production target of 1.78 million barrels of oil daily minus condensates to achieve revenue projections.

However, market analysts told Business Post that the chances of meeting the oil production target are bleak and pose a threat to the implementation of the budget for the year as it leads to revenue shortfalls. Oil is responsible for more than 80 per cent of all Nigeria’s FX earnings.

Nigeria received its first dent to the budget benchmark in December when the oil cartel OPEC reduced its production quota to 1.5 million barrels per day from around 1.7 million barrels per day earlier set.

The move follows a meeting in June 2023 where OPEC+ agreed to a complex deal that revised production targets for several members.

OPEC had tasked three consultancies – IHS, Rystad Energy, and Wood Mackenzie – with verifying production figures for Nigeria, Angola, and Congo, and based on their recommendation, Nigeria has to produce at that level.

In total, members of the OPEC cartel produced around 26.34 million barrels per day for January, which represents a decline of 350,000 barrels daily when compared with the total production for the previous month.

The report further noted that the world’s oil supply for the month dropped by 0.6 million barrels daily to around 101.8 million barrels per day.