By Adedapo Adesanya
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is targeting an annual oil and condensates production target of 2.6 million barrels per day by 2026, an ambitious jump from 2023 levels of around 1.6 million barrels per day.
The upstream oil regulator said in its 2024-2026 action plan that it would direct the development of oil assets to areas less prone to theft and vandalism and provide regulatory support for alternative crude oil evacuation routes.
Nigerian output has been in decline for years but has picked up in recent months helped by more production offshore, which is less prone to security problems.
According to the latest gross domestic product (GDP) data, Nigeria averaged 1.45 million barrels per day in the third quarter of the year.
Oil, while contributing around 5 per cent to Nigeria’s GDP, accounts for around 80 per cent of its foreign earnings.
Its production is expected to rise from 1.8 million barrels per day this year and progress to 2.6 million barrels per day in 2026, the NUPRC said.
The said it was also working to cut the cost of oil production to about $20 a barrel, down from between $25 and $40, by providing incentives to oil producers.
“The commission will set up a framework for crude oil and gas transportation and/or handling costs based on a standardised tariff (and) implement an open access regime for upstream oil and gas pipelines and ancillary facilities,” the regulator said.
The NUPRC also said that high signature bonuses, a one-off fee paid to secure exploration blocks, would be reduced to attract more investment and raise oil production.
Recall that the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) handed Nigeria a 2024 oil output target lower than its estimate of 1.78 million barrels per day in the 2024 budget. The country was asked to pump about 1.5 million barrels per day by the cartel, of which Nigeria is a member.
The move follows a meeting in June 2023 where OPEC+ agreed on a complex deal that revised production targets for several members.
To spur the development of the oil sector, President Bola Tinubu met with top oil companies like TotalEnergies, Shell, and Exxon Mobil late last year and it was announced that they have committed to invest $13.5 billion in the short term.
