Nigeria’s Oil Production Rises Despite Challenges
By DAYO ADESULU
Year-on-Year Increase in Production
Nigeria’s daily average oil production rose by 7.38% in December 2024, reaching 1.667 million barrels per day (bpd) compared to 1.552 million bpd in December 2023, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
On a month-on-month basis, however, production dropped slightly by 1.35%, from 1.690 million bpd in November 2024 to 1.667 million bpd in December 2024.
Cumulatively, the country produced 51.69 million barrels in December 2024, up 1.9% from 50.71 million barrels in November 2024.
Peak and Terminal Contributions
Peak daily production in December was 1.79 million bpd, while the lowest was 1.57 million bpd. The Forcados Terminal led production with 8.49 million barrels, followed by Bonny Terminal at 7.78 million barrels, and Qua Iboe at 4.15 million barrels.
Excluding condensates, the daily average oil production stood at 1.484 million bpd, falling short of the 1.5 million bpd quota set by the Organization of Petroleum Exporting Countries (OPEC) and the 1.7 million bpd benchmark in Nigeria’s 2024 budget.
Improvements and Reforms Driving Growth
Reflecting on the increase, Senator Heineken Lokpobiri, Minister of State for Petroleum Resources (Oil), attributed the improvement to:
- Removal of regulatory bottlenecks.
- Collaborative stakeholder engagement.
- Significant investments in the oil and gas sector.
Lokpobiri praised the Presidential directive for boosting production and outlined initiatives such as community engagement, elimination of licensing delays, and robust institutional reforms.
“From 1 million bpd when we started, we have boosted output to 1.8 million bpd, including condensates, and aspire for greater heights,” Lokpobiri noted.
Challenges to Sustaining Growth
Despite these gains, Nigeria’s oil output is hindered by:
- Pipeline Vandalism and Theft:
Pipeline attacks reduced output by 5.6%, dropping from 1.8 million bpd in October 2024 to 1.7 million bpd in November 2024. Oil companies, including Shell, have reported numerous incidents of oil spills caused by theft, sabotage, and illegal refining. - Security Concerns:
The Nigerian National Petroleum Company Ltd (NNPCL) uncovered 33 illegal crude oil connections and destroyed 72 illegal refineries between August and November 2024, showcasing ongoing threats to production stability.
Regulatory and Industry Developments
The Petroleum Industry Act (PIA), enacted in 2021, has attracted significant investor interest:
- 2024 Licensing Rounds:
Several local and international companies secured rights to new exploration blocks, signaling optimism in Nigeria’s hydrocarbon sector. - Regulatory Reforms:
NUPRC introduced 25 critical regulations, 17 of which have been gazetted, ensuring transparency, predictability, and confidence among investors.
“The industry has seen increased rig activities, well interventions, and field developments, reflecting the impact of these reforms,” said NUPRC’s Chief Executive, Engr. Gbenga Komolafe.
Looking Ahead
Despite challenges, the outlook for Nigeria’s oil sector remains promising:
- Increased investments and collaborations.
- Ongoing reforms aimed at boosting production capacity.
- Initiatives to tackle oil theft and sabotage.
Nigeria’s ability to address these challenges and achieve sustainable production growth will be critical for its energy security and economic development.
