Nigeria’s Oil Output in August falls below the 2023 budget projection
According to information from OPEC’s September 2023 report, Nigeria’s oil production increased by 9.3% from 1.08 million barrels per day (mb/d) in July to 1.18 million barrels per day (mb/d) in August 2023. However, oil production is still considerably behind the 1.69 mb/d estimate in the 2023 budget as well as the 1.74 mb/d quota that OPEC has allotted to Nigeria.
Nigeria’s future quota was decreased by OPEC in June 2023 from 1.74 mb/d to 1.38 mb/d, a reduction of nearly 20%. If the output level stays low, the new quota will take effect in January 2024.
According to data on crude oil production, Nigeria is not obtaining the full fiscal cushion brought on by the recent increase in crude oil prices, which are now above $90 per barrel. The chronic problems that plague oil production, such as crude oil theft and outdated infrastructure, are reflected in Nigeria’s poor output levels.
To achieve a considerable rise in production level that exceeds both the forecast in the 2023 budget and the OPEC quota, government efforts to address all issues affecting Nigeria’s oil production are necessary. In order to draw domestic and foreign investors to the oil industry for revival and prompt replacement of outdated and aging infrastructure, efforts should be made to ensure that the Petroleum Industry Act (PIA) is completely implemented.
The country’s oil infrastructure need to be more securely guarded, and anyone caught damaging the installations should face harsh penalties. This is another crucial answer to Nigeria’s low oil production capacity.
