Five months into President Asiwaju Bola Ahmed Tinubu’s tenure, Nigeria has witnessed a modest increase of 131,926 barrels per day in crude oil production, according to data sourced from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), as analyzed by Infostride News.
When President Tinubu assumed office in May 2023, the daily crude oil production, including condensates, stood at 1,430,146 barrels. Subsequently, in June 2023, the output rose to 1,499,416 barrels per day. However, a slight dip occurred in July 2023, with production recorded at 1,303,428 barrels daily.
August 2023 witnessed an increase, reaching 1,414,664 barrels per day. September 2023 marked a significant milestone for the year, as Nigeria achieved its highest production, hitting 1,572,315 barrels per day. In October 2023, there was a minor dip, and production levels slightly decreased to 1,562,072 barrels per day. These fluctuations indicate a dynamic scenario for Nigeria’s daily crude oil output during this period.
President Tinubu’s strategic move to separate gas from petroleum upon assuming office led to the appointment of Ekperikpe Ekpo as the Minister for Petroleum Resources (Gas) and Heineken Lokpobiri as the Minister of State for Petroleum Resources. This groundbreaking decision aimed to enable each minister to focus on specific objectives, with Lokpobiri tasked with increasing crude oil production and Ekpo focused on transitioning Nigeria to a gas-based economy.
Minister Lokpobiri, since assuming his role, has been actively engaging with stakeholders and investors to revitalize Nigeria’s energy sector. His efforts from August to November 2023 have included visits to the Port Harcourt and Warri refineries, where assurances were given about their operational resumption. Further, he conducted discussions with Shell Petroleum Development Company (SPDC) and SINOPEC, emphasizing the need to strengthen relations and boost local oil production.
Throughout September, Lokpobiri actively resolved a divestment disagreement between NNPCL and ExxonMobil, aiming to augment the country’s oil and gas output. His engagements also included meetings to enhance partnerships, talks with Shell’s Executive Vice President, and a commitment to operate under the Petroleum Industry Act (PIA) to achieve a production milestone of over 2 million barrels of oil per day between December 2023 and early 2024.
Minister Lokpobiri’s initiatives extended to localizing petroleum production by engaging operators to supply crude to modular refineries to meet local demand. In October, he met with local oil companies like Oando Plc to fortify their ability to manage assets previously owned by international oil corporations. In November 2023, he signed an energy cooperation Memorandum of Understanding with Saudi Arabia and held discussions with Daewoo E & C Limited and Seplat Energy, aimed at fortifying Nigeria’s refining capabilities.
Despite these proactive measures, Nigeria has consistently failed to meet its 1.7 million barrels per day quota assigned by OPEC. Analysts point to the persistent challenges of crude oil theft and vandalism in the Niger Delta region, where over 5,000 incidents were reported from May 2023 to the first week of November 2023, according to weekly data from the Nigerian National Petroleum Company Limited (NNPCL).
The NNPCL continues to provide data on these incidents despite efforts by Nigerian security agencies and third-party partners to curb the menace. Analysts suggest that addressing crude oil theft and vandalism is crucial to instilling confidence in investors and attracting new investments to the sector.
Moreover, industry analysts emphasize the importance of transparency within the oil sector to attract more investors. Transforming the industry into an open and accessible sector, with real-time data on activities like seismic surveys, drilling, and environmental impact assessments readily available, could create a more informed and inclusive environment. This shift aims to empower potential and current investors to make informed business decisions swiftly.
Oil market analyst Dan D. Kunle highlighted the significance of transparency, stating that it provides investors with a clearer understanding of ongoing activities and potential opportunities. This transparency benefits not only investors but also allows the public to comprehend the industry’s operations and associated impacts.
In September 2023, the special adviser on energy to President Tinubu, Ms. Olu Verheijen, revealed that the administration had secured $13 billion worth of oil and gas investment from major players like Chevron, Total, Shell, NAOC, Exxon Mobil, Seplat, Heirs Holdings, Waltersmith, and First E&P. She anticipates that the $13.5 billion in short-term investment components, currently in the pipeline, will pave the way for the delivery of 2.1 million barrels per day production by December 2024, subject to unforeseen challenges.
As Nigeria navigates its oil production challenges, the efforts of the Tinubu-led administration and Minister Lokpobiri reflect a commitment to addressing industry issues, fostering partnerships, and positioning the country for increased oil production in the coming years. The success of these endeavors will likely hinge on sustained efforts to combat theft, vandalism, and a continued commitment to transparency and openness within the sector.
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