More challenges as oil production in Nigeria fell in May
In May 2024, Nigeria experienced a decrease in oil production by 30,000 barrels per day (bpd) to 1.25 million bpd, as reported by OPEC. This drop has widened the gap between oil production in Nigeria level and OPEC quota of 1.38 million bpd, as well as the Federal Government’s budgeted benchmark of 1.78 million bpd.
The situation is further complicated by the slight decrease in global oil prices to $80.96 per barrel, posing significant challenges for the country in terms of revenue generation and foreign reserves. The decline of oil production in Nigeria underscores various issues plaguing the oil sector, such as crude oil theft, oil bunkering, illegal refining, and frequent disruptions in production processes leading to reduced output on a daily basis.
To achieve the oil production in Nigeria levels outlined in the 2024 budget, the government must address oil bunkering and production disruptions decisively, while also attracting investments into the sector. This necessitates the implementation of stringent measures against illegal activities like oil theft and safeguarding oil infrastructure from vandalism.
Additionally, the government should enforce the Petroleum Industry Act (PIA) and create a conducive business environment to entice private investments in the oil industry. Increased investments will enhance transparency and efficiency in the sector, ultimately helping Nigeria meet its production targets and boost oil revenues.
