For the first time in over four years, Nigeria has met its crude oil production quota set by the Organisation of Petroleum Exporting Countries (OPEC), hitting 1.51 million barrels per day (bpd) in December 2024. This marks a significant turnaround for a country that has struggled with oil theft, outdated infrastructure, and dwindling investment in its petroleum sector.
Minister of State for Petroleum Resources, Heineken Lokpobiri, attributed the success to the policies and directives of President Bola Ahmed Tinubu. Speaking during a media briefing, Lokpobiri lauded the administration’s efforts, stating, “With the presidential directive to ramp up oil production to a sustainable level, the journey of transformation in our oil sector began.”
Surmounting Challenges
For years, Nigeria lagged behind its OPEC quotas, initially set at 1.8 million bpd and later reduced to 1.5 million bpd in 2023 due to underperformance. As recently as November 2024, the country came close but failed to meet the quota, producing 1.485 million bpd. The chronic shortfall was blamed on rampant oil theft in the Niger Delta, sabotage, and a lack of investment.
Despite these challenges, December’s production exceeded expectations, even as OPEC’s overall output dipped due to supply cutbacks from countries like the UAE. A Bloomberg survey revealed that Nigeria’s output increased by 40,000 bpd in December, making it one of the few OPEC members to post gains during the period.
A Shift in Strategy
Lokpobiri credited Tinubu’s administration with initiating bold reforms that revitalized the oil sector. “From the production level of one million bpd when we began, we have boosted output to 1.8 million bpd, inclusive of condensates, and continue to aspire for even greater heights,” he said.
Among the key reforms were the removal of bureaucratic bottlenecks in licensing, the deregulation of the downstream sector, and increased community engagement to ensure peace in oil-producing regions. These measures, Lokpobiri argued, have eliminated many of the risks that previously deterred investors.
The government also secured a major win by hosting the African Energy Bank (AEB), the continent’s first energy-focused financial institution. Set to launch in January 2025 with an initial capital of $5 billion, the bank aims to bolster investments in Africa’s energy sector.
Investment and Development
Shell Nigeria Exploration and Production Company Limited (SNEPCo) has also committed to a $5 billion investment in the Bonga North project, a deep-water initiative expected to produce 110,000 bpd at peak output. The project will sustain oil and gas production at Shell’s Bonga facility, adding over 300 million barrels of recoverable resources.
Lokpobiri emphasized the role of international partnerships and foreign investments in achieving these milestones. “We embraced it wholeheartedly, engaging stakeholders both domestically and internationally to build synergy and foster partnerships,” he said.
Reaping the Rewards
The Tinubu administration’s approach appears to be paying off. By meeting its OPEC quota, Nigeria has strengthened its position within the global oil market, signaling a return to stability and growth. Experts believe that sustained production levels could significantly boost the country’s revenue, particularly at a time when crude oil prices are crucial to Nigeria’s economy.
Despite the progress, challenges remain. OPEC’s production cuts and market volatility mean that maintaining and exceeding current production levels will require continued investment and operational efficiency.
A Promising Future
Reflecting on the journey, Lokpobiri declared, “From where we started to where we are now, the progress is undeniable. With these accomplishments, the future promises even greater growth and development for the benefit of Nigerians.”
