Nigeria, the largest oil producer in Africa, has come out on top as the leading crude oil producer on the continent, according to the latest monthly report from the Organisation of Petroleum Exporting Countries (OPEC). The report indicates that Nigeria produced 1.268 million barrels per day (bpd) in March 2023, surpassing its African peers, Algeria and Angola, which produced one million and 972,000 bpd, respectively.
However, the report also sheds light on Nigeria's struggle to meet its OPEC quota of 1.8 million bpd and its 2023 budget benchmark of 1.6 million bpd. The Nigerian Upstream Regulatory Commission (NUPRC) revealed that Nigeria failed to meet its production targets and reported the lowest production so far this year.
According to the report, several factors could be attributed to this setback, including a lack of investments, security risks, and production sabotage. The shutdown of the Trans Niger Pipeline, which has been closed for over a year due to pipeline vandalism and oil theft, has further impacted Nigeria's oil production and revenue, Leadership NG reported.
At the Nigerian International Energy Summit, the Chairman of Shell Companies in Nigeria, Osagie Okubor, lamented the devastating effects of pipeline vandalism and oil theft, noting that the Trans Niger Pipeline's shutdown had resulted in a loss of approximately 65,700,000 barrels of oil. This translates to a loss of around $5.45 billion or N2.3 trillion in revenue, based on an average oil price of $83 during the period.
The challenges facing Nigeria's oil sector go beyond production and revenue losses. They have far-reaching consequences, including the impact on the gas supply to the Nigeria Liquefied Natural Gas, which is responsible for 60% of the country's gas supply capacity.
While Nigeria has introduced various policies and frameworks to tackle the challenges in the oil sector, implementing these policies and frameworks remains a challenge. The Nigerian government needs to prioritise the security of oil infrastructure, implement existing policies and frameworks, and ensure that the country's oil sector runs efficiently to meet production targets and revenue goals.