Nigeria, the largest oil producer in Africa and a prominent OPEC member, is embarking on an ambitious endeavor to significantly escalate its daily oil production to reach up to 1.7 million barrels by November 2023. The objective behind this push is to secure a higher allocation within the OPEC+ agreement. Gabriel Tanimu Aduda, the Permanent Secretary at Nigeria’s Ministry of Petroleum Resources, shared this aspiration during the OPEC+ seminar held in Vienna this week, as reported by Energy Intelligence.
Historically, Nigeria has struggled to meet its production quota within the OPEC+ alliance. A combination of pipeline sabotage, rampant oil theft, and inadequate investment in capacity has rendered Nigeria the most lackluster performer in terms of crude oil production. The pervasive issues of oil theft and pipeline vandalism have long plagued the country’s upstream oil and gas industry, compelling major oil companies to withdraw their presence and frequently leading to force majeure declarations at critical crude oil export terminals.
Earlier this year, Nigeria’s assigned quota stood at 1.742 million barrels per day. However, due to its consistent underperformance of over 400,000 barrels per day, Nigeria’s output ceiling was revised downward to 1.38 million barrels per day during the OPEC+ meeting held in early June.
To determine the required production level for Nigeria, the next OPEC+ meeting, slated for the end of 2023, will evaluate assessments provided by three independent sources specialized in upstream oil analysis—IHS, Wood Mackenzie, and Rystad Energy. The outcome will likely align Nigeria’s target with the average production achievable in 2024, as announced by OPEC.
Nigeria’s stipulated Production Plan for 2024 stands at 1.578 million barrels per day, pending verification. If confirmed, this figure will serve as the benchmark for required production in 2024, according to OPEC’s statement.
Presently, Nigeria’s oil production falls approximately one million barrels per day short of its capacity. The government attributes this shortfall to factors such as limited investment, scarce funding sources resulting from the ongoing energy transition, and heightened security concerns. Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), highlighted these challenges in May, emphasizing that despite a technical allowable capacity of around 2.5 million barrels per day, current production remains at approximately 1.5 million barrels of oil and condensate per day.
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