In September 2022, Nigeria’s daily crude oil production, as shown in the monthly oil market report (MOMR) of the Organization of the Petroleum Exporting Countries (OPEC), stood at 938,000 barrels per day (bpd).
The production level is below the OPEC quota and about 59 percent of the 1.6 million bpd stipulated in the 2022 amended budget. Also, Nigeria’s average quarterly production declined to 999,000 bpd in Q3 2022 from 1.13 million bpd in Q2 2022.
The low production is mainly due to the legacy issues such as oil theft/bunkering, vandalism, weak/ageing infrastructure, and low investment. The low production implies that Nigeria had limited gains from the high oil prices recorded in the first three quarters of 2022, which is above the 2022 budget benchmark of $73 per barrel.
Hence, for Nigeria to achieve the budget production benchmark of 1.6 million bpd, the government must tackle the structural factors of oil theft, insecurity and ageing infrastructure that have crippled production. Effective alliances between the government, private sector, and host communities are essential. The alliance would seek to address the structural factors and, in turn, boost crude oil production.