Nigeria’s crude oil production surge to 1.28million bpd in April

In April 2024, Nigeria witnessed a notable increase in oil production, with a rise of 51,000 barrels per day (tb/d) to reach 1.28 million barrels per day (mb/d), as reported by OPEC’s oil market report. Although this is a positive development, it is important to note that Nigeria’s output still falls short of both OPEC’s 2024 quota for the country (1.38 mb/d) and the government’s 2024 budget benchmark (1.78 mb/d).

The increase in oil production carries favorable implications for the Nigerian economy, particularly in terms of boosting oil exports. This, in turn, will lead to an increase in foreign exchange inflow and strengthen the country’s foreign reserves. However, the fact that the output remains below the budget benchmark indicates that Nigeria is not meeting its expected oil production and export levels as outlined in the budget.

The low production levels reflect the challenges faced by Nigeria’s oil sector, including issues such as crude oil theft, oil bunkering, illegal refining, and disruptions in the production process. To address these challenges and enhance production to meet the budget benchmark, the government should prioritize improving security measures at oil facilities nationwide to deter bunkering and all forms of oil theft. Additionally, creating an enabling environment for increased investment in key areas of the oil sector, including infrastructure, is crucial.

In addition to the sale of crude oil, it is essential to invest in the timely completion of refinery projects across the country. This will not only contribute to boosting foreign earnings but also generate higher export earnings through the sale of refined oil, which is more lucrative than the crude form.