The federal government’s lofty target of producing 2 million barrels of crude oil per day (bpd) by the end of December 2024 is facing a major obstacle as Nigeria, Africa’s largest oil producer, struggles with a 27 percent year-to-date decline in active oil rigs.
According to the Organisation of Petroleum Exporting Countries (OPEC) November 2024 Monthly Oil Market Report, there were just 11 operational oil drilling rigs nationwide in October.
According to OPEC data, the nation operated an average of 17, 17, and 14 oil rigs in the first, second, and third quarters of 2024.
An oil rig/platform is a sizable building that contains facilities for extracting and processing natural gas and petroleum from submerged rock formations.
The number of rigs indicates a nation’s oil and gas industry’s level of exploration, development, and production activity. Active oil exploration boosts the nation’s economy by bringing in money and investment.
“Nigeria, a previously bright spot on big oil and gas investors’ radar screens, has dimmed significantly as investor attention is increasingly drawn to new and emerging developments in Namibia, Ivory Coast, Angola, and the Republic of Congo,” said NJ Ayuk, executive chairperson of the African Energy Chamber.
“With two-thirds or more of its revenue coming from oil, investor flight is a serious problem for Nigeria.”
According to data from the National Bureau of Statistics (NBS), by 2023, the nation’s foreign capital investments in the sector had dropped from $720 million in 2016 to $3.64 million.
The paper claims that during the first three months of 2024, Nigeria imported $3.38 billion in capital, of which none went to the petroleum sector.
In December of this year, the federal government established a goal of 2 million barrels per day, which now seems like a lofty goal as the nation’s rig falls.
The state minister of petroleum (oil), Heineken Lokpobiri, stated: “The shortest way for us to get out of our current economic problems is to increase production.
“And our target is that by December we want to hit at least two million barrels,” Lokpobri added.
Furthermore, according to the government, Nigeria is currently increasing its output, with 1.8 million barrels per day as of November 2024.
The state-owned oil corporation and its partners have increased crude oil and gas production to 1.8 million barrels per day (mbpd) and 7.4 standard cubic feet per day (scfd), respectively, according to Mele Kyari, group chief executive officer of the Nigerian National Petroleum corporation Limited (NNPC).
Kyari clarified, “The team has done a great job in driving this project of not just production recovery but also escalating production to expected levels that are in the short and long term acceptable to our shareholders based on the mandates that we have from the President, the Honourable Minister, and the Board.”
Nigeria’s crude oil production increased by an average of 35,000 barrels in October, reaching 1.434 million barrels per day (bpd), according to OPEC’s most recent oil market report.
Based on secondary statistics from Nigerian officials, the study claims that output increased from 1.399 million barrels per day in September.
According to direct communication, Nigeria produced 1.333 million barrels of crude oil per day on average in October, which was 9,000 more than the 1.324 million barrels produced the month before.
